IRS warning to Itronics: Time to pay
The Internal Revenue Service has threatened to seize property of Reno-based Itronics Inc.
unless the company pays $93,273 in back taxes.
The publicly held company said in a filing with the Securities and Exchange Commission that it had worked out a plan to pay off the $206,200 in payroll taxes it owed at the start of the year and paid a total of $115,000 in January and March.
Since then, the company said, it hasn’t made any payments, and the IRS set a deadline of June 12 for the company to pay up or appeal.
The company, which converts photochemical wastes into fertilizer, also said it’s defaulted on the payments for equipment it leases.
Itronics said it faced nine lawsuits concerning equipment leases at the
start of the year, settled six of the lawsuits by restructuring the leases, but now is in default on five of the restructured deals.
The company reported a loss of $2.4 million on revenues of $1.7 million during 2004.
A year earlier, it lost $2.2 million on revenues of $1.27 million.
In a press release, President John Whitney said that sales of Itronics’ fertilizer during the year grew to $1.02 million from $554,000 a year earlier.He projected continued sales increases as the product is marketed this year in the Northwest and seven Northeastern states for the first time.
That’s important, the company said, because so many of its costs are fixed.As sales rise, costs won’t increase proportionately.
But the company’s auditors, Cacciamatta Accountancy Corp., said there’s substantial doubt about Itronics’ ability to stay in business unless it becomes profitable and can raise enough cash to pay its bills.
Among the bills it owes are the $126,000 annual salary ofWhitney and the $132,000 annual salary of Duane Rasmussen, its vice president and general manager.Neither was paid in 2002, 2003 or 2004, although each received stock and warrants to cover some of what the company owned them.
Itronics said in the SEC filing that it’s working to find capital to carry it for the next two or three years.
It’s the first legal action brought against the mining tax proposals, each of which were voted on mostly party-line votes during this summer’s special legislative session in Carson City.