1. The IRS won't seize your startup. It doesn't have any value -- could they sell it to get cash? Doubtful. 2. The IRS can make your life personally miserable.

1. The IRS won't seize your startup. It doesn't have any value -- could they sell it to get cash? Doubtful. 2. The IRS can make your life personally miserable. Or not. In my experience the best way to keep them off your back is to communicate, not hide, and start sending money. Even if you are only sending in $50 per month that shows your intent. 3. Creditors will not seize your startup. They can't sell it to raise cash. 4. Creditors will make your life hell. 5. All of this assumes you formed a company of some kind for your startup. If it is just you -- as a sole proprietor -- you may be f'd. 6. This debt problem will consume an incredible number of brain CPU cycles. You will be distracted until you install a payment plan and have it in progress. It will -- in my personal first-hand :-) experience talk to you constantly. This is so important to get handled. And yes. Tell your funding people. If you hide it and they find out you are screwed -- not because you are in debt but because you don't tell the truth.