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SIGNATURE LESLIE L. OGG
TITLE VICE PRESIDENT
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<NET-CHANGE-IN-ASSETS> 5087963
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 2
<OVERDIST-NET-GAINS-PRIOR> 38543
<GROSS-ADVISORY-FEES> 115713
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 294796
<AVERAGE-NET-ASSETS> 19211293
<PER-SHARE-NAV-BEGIN> 5.09
<PER-SHARE-NII> .19
<PER-SHARE-GAIN-APPREC> .05
<PER-SHARE-DIVIDEND> .19
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.14
<EXPENSE-RATIO> .92
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> IDS INTERMEDIATE TAX-EXEMPT FUND CLASS B
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 27045169
<INVESTMENTS-AT-VALUE> 27551279
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<OTHER-ITEMS-LIABILITIES> 38692
<TOTAL-LIABILITIES> 334239
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 27205915
<SHARES-COMMON-STOCK> 1366307
<SHARES-COMMON-PRIOR> 1092400
<ACCUMULATED-NII-CURRENT> 3071
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 38432
<ACCUM-APPREC-OR-DEPREC> 506110
<NET-ASSETS> 7020000
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1190565
<OTHER-INCOME> 0
<EXPENSES-NET> 276850
<NET-INVESTMENT-INCOME> 913715
<REALIZED-GAINS-CURRENT> 111
<APPREC-INCREASE-CURRENT> 260381
<NET-CHANGE-FROM-OPS> 1174207
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 191469
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 874848
<NUMBER-OF-SHARES-REDEEMED> 635720
<SHARES-REINVESTED> 34779
<NET-CHANGE-IN-ASSETS> 5087963
<ACCUMULATED-NII-PRIOR> 0
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<OVERDIST-NET-GAINS-PRIOR> 38543
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<AVERAGE-NET-ASSETS> 6362840
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<PER-SHARE-NII> .15
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<PER-SHARE-NAV-END> 5.14
<EXPENSE-RATIO> 1.67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> IDS INTERMEDIATE TAX-EXEMPT FUND CLASS Y
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 27045169
<INVESTMENTS-AT-VALUE> 27551279
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<OTHER-ITEMS-LIABILITIES> 38692
<TOTAL-LIABILITIES> 334239
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<PAID-IN-CAPITAL-COMMON> 27205915
<SHARES-COMMON-STOCK> 216
<SHARES-COMMON-PRIOR> 207
<ACCUMULATED-NII-CURRENT> 3071
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 38432
<ACCUM-APPREC-OR-DEPREC> 506110
<NET-ASSETS> 1107
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<EXPENSES-NET> 276850
<NET-INVESTMENT-INCOME> 913715
<REALIZED-GAINS-CURRENT> 111
<APPREC-INCREASE-CURRENT> 260381
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 43
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
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<SHARES-REINVESTED> 9
<NET-CHANGE-IN-ASSETS> 5087963
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 2
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 294796
<AVERAGE-NET-ASSETS> 1082
<PER-SHARE-NAV-BEGIN> 5.09
<PER-SHARE-NII> .19
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<PER-SHARE-DIVIDEND> .20
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 5.13
<EXPENSE-RATIO> 0.78
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
EXHIBIT 77D
for IDS Tax Exempt Bond Fund, Inc.
series IDS Tax-Exempt Bond Fund
At the Board of Directors meetings held on October -7-8, 1998,
the following investment policies were eliminated:
The Fund will not pledge or mortgage its assets beyond 15%
of total assets.
The Fund will not invest more than 5% of its assets in
securities whose issuer or grantor of principal and interest has
been in operation for less than three years.
The Fund will not invest more than 5% of its net assets in
warrants.
The Fund will not invest in exploration or development
programs such as oil, gas or mineral leases.
EXHIBIT 77D
for IDS Tax Exempt Bond Fund, Inc.
series IDS Intermediate Tax-Exempt Fund
At the Board of Directors meetings held on October -7-8, 1998,
the following investment policies were eliminated:
The Fund will not pledge or mortgage its assets beyond 15%
of total assets.
The Fund will not invest more than 5% of its assets in
securities whose issuer or grantor of principal and interest has
been in operation for less than three years.
The Fund will not invest more than 5% of its net assets in
warrants.
The Fund will not invest in exploration or development
programs such as oil, gas or mineral leases.
The Fund will not purchase securities of an issuer if the
board members and officers of the Fund and of American Express
Financial Corporations (AEFC hold more than a certain
percentage of the issuer's outstanding securities. If the
holdings of all board members and officers of the Fund and of
AEFC who own more than 0.5% of an issuer's securities are added
together, and if in total they own more than 5%, the Fund
will not purchase securities of that issuer.
Independent Auditors' Report
on Internal Accounting Control
The Board of Directors and Shareholders
IDS Tax-Exempt Bond Fund, Inc.:
In planning and performing our audit of the financial statements
of IDS Tax-Exempt Bond Fund and IDS Intermediate Tax-Exempt Fund
(funds within IDS Tax-Exempt Bond Fund, Inc.) for the year ended
November 30, 1998, we considered their internal control, including control
activities for safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements
of Form N-SAR, not to provide assurance on the internal control.
The management of IDS Tax-Exempt Bond Fund, Inc. is responsible
for establishing and maintaining internal control. In fulfilling
this responsibility, estimates and judgments by management
are required to assess the expected benefits and related costs
of controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial
statements for external purposes that are fairly presented
in conformity with generally accepted accounting
principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or
irregularities may occur and not be detected. Also,
projection of any evaluation of internal control to future
periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness
of the design and operation may deteriorate.
Our consideration of the internal control would not necessarily
disclose all matters in the internal control that might be
material weaknesses under standards established by the
American Institute of Certified Public Accountants.
A material weakness is a condition in which the
design or operation of one or more of the internal
control components does not reduce to a relatively low
level the risk that errors or irregularities in amounts
that would be material in relation to the financial
statements being audited may occur and not be detected
within a timely period by employees in the normal course
of performing their assigned functions. However, we
noted no matters involving the internal control and
its operation, including controls for safeguarding
securities, that we consider to be a material weakness
as defined above.
This report is intended solely for the information and use
of management, the Board of Directors of IDS Tax-Exempt Bond
Fund, Inc., and the Securities and Exchange Commission
and is not intended to be and should not be used by anyone other
these specified parties.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 8, 1999
