Computer Firm Will Pay IRS for Back Taxes

General Automation Inc. said Thursday that it has signed an agreement with the Internal Revenue Service to pay $4.5 million in back taxes, interest and penalties over two years.

The Anaheim computer maker said it will make a first payment of $500,000 on June 30, followed by quarterly payments of $500,000 each until the obligation is eliminated.

The payments are the result of an IRS audit of the company’s tax reports over 10 years ending with its 1981 fiscal year. General Automation Chairman Leonard Mackenzie said the company has already accounted for the anticipated settlement in its financial statements for 1987 and previous years.

The initial $500,000 payment will be made out of proceeds from the sale of $1 million in unsecured notes to a group of private investors, Mackenzie said. The notes are accompanied by warrants to buy 110,000 shares of the company’s common stock, at $6.38 per share.

For several years, General Automation has been trying to turn itself around with asset sales and debt restructuring. After seven years of losses, the company recently said it expects to report an operating profit of $540,000 to $810,000 for the fiscal year ending June 30.

General Automation stock closed Thursday at $5.25 per share, down 25 cents for the day.