Willie Nelson’s assets are seized by the IRS - November 9th, 1990

On this day in 1990, the IRS seized Willie Nelson’s properties in six states for non-payment of taxes.

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Episode Transcript

Speaker 1 (00:00):
This Day in History Class is production of iHeartRadio. Hello
and welcome to This Day in History Class, a show
that brings you both the blue Skies and the Bloody
Mary Mornings of everyday history. I'm Gay Bluesier and today
we're talking about the infamous showdown between a country music

(00:20):
legend and the Internal Revenue Service. The day was November ninth,
nineteen ninety. The IRS seized Willie Nelson's properties in six
states for non payment of taxes. The federal agents who

(00:40):
rated his primary residence in Austin, Texas, also took possession
of thousands of Nelson's personal belongings. They took his instruments,
master recordings, and studio equipment, as well as his furniture, clothing,
and music memorabilia. The intention was to sell it all
at auction to help settle the country singer's multimillion dollar

(01:02):
tax bill, but things didn't turn out exactly as planned.
Willie Nelson's tax troubles began in nineteen eighty four when
the IRS began investigating a rather large deduction he had
claimed on his returns. It was for a series of
tax shelter investments which Nelson claimed had been promoted to
him by the Price Waterhouse accounting firm. The shelter in

(01:25):
question was eventually ruled illegal, and Nelson was assessed six
million dollars in unpaid taxes and ten million dollars in
interest and penalties. The singer sued Price Waterhouse for their
bad advice, and after many years of litigation, they reached
an undisclosed settlement. But in the meantime there was the
matter of the bill. Nelson's lawyers were able to talk

(01:49):
the IRS into waiving the interest and penalties in settling
for just the original six million in unpaid taxes. The
problem was Willie Nelson didn't have six million time. In fact,
according to his daughter Lana Quote, he didn't have one
million dollars. He probably didn't have thirty thousand. Turns out,

(02:10):
Nelson's sizeable earnings as one of the world's most popular
country music stars still wasn't enough to cover his free spending.
I did mention he had properties in six states. The
IRS agreed to put Nelson on an installment plan with
the interest and penalties reinstated, but the singer rarely made
payments and never very large ones. Meanwhile, interests and penalties

(02:33):
continued to accrue, and by nineteen ninety Nelson's tax debt
had just about doubled to thirty two million dollars. Negotiations
with the singer broke down once he saw the new bill,
prompting the IRS to drop the hammer on November ninth.
Nelson saw the writing on the wall in advance and
made sure he was away golfing in Hawaii when the

(02:55):
IRS agents came calling. He even had his daughter remove
his favorite guitar trigger from his Texas home and ship
it to him and Maui for safe keeping. As long
as I got my guitar, Nelson said at the time,
I'll be fine. He didn't know how right he was,
because not only did the singer get to keep his
beloved guitar, he got most of his other stuff back too.

(03:19):
The IRS held several public auctions in Texas to sell
off Nelson's property, but they didn't make nearly as much
money as expected. Most Texans refused to bid out of
respect for Nelson, and even though his ranch there was sold,
the bidder turned out to be a fan who would
shortly return the property to the singer. The money to
buy the house had been raised by a group of

(03:41):
farmers who wanted to pay Nelson back for his work
in organizing the farm Aide charity concerts. The IRS realized
the auctions were getting them nowhere, so they sold off
Nelson's remaining items and a lot priced at a mere
seven thousand dollars. Once again, though the buyer was a friend,
ensuring that Nelson would get most of his prized possessions

(04:02):
back in addition to his Texas home. That said, all
those low ball bids meant that the singer's debt remained unresolved.
Nelson made a few substantial good faith payments over the
next few years, and in nineteen ninety one he worked
out a rather unusual deal with the IRS to pay
off the rest. The singer would record a two disc

(04:25):
compilation album and use part of the proceeds to pay
down what he still owed. It was the first and
so far only deal of its kind. To keep the
recording costs low, Nelson decided to do stripped down acoustic
versions of some of his previously released songs and a
few new ones. The resulting album, called the IRS Tapes

(04:46):
Who Will Buy My Memories, features nothing but Nelson and
Trigger and include several songs that likely match the singer's
mood at the time, such as remember the good times
and what can you do to me?

Speaker 2 (04:58):
Now?

Speaker 1 (04:59):
Take a list?

Speaker 2 (05:00):
What can you do to me now that you haven't
done to me already? You broke my pride and made
me cry out loud, So what can you do to

(05:28):
me now?

Speaker 1 (05:31):
The IRS tapes were released on CD and cassette in
the summer of nineteen ninety one, but initially it was
sold only by phone and mail order. The album was
advertised on a Sappy TV infomercial and promised buyers the
quote satisfaction of helping one of America's greatest treasures, and
all for the low low price of nineteen ninety five

(05:53):
plus four dollars shipping and handling.

Speaker 3 (05:55):
Willie Nelson. He's been there for those who needed him,
and he's helped thousands of people who cross this land. Now,
will he needs your help, and he's reaching out the
best way he can through his music. This is the
only Willy Nelson album where proceeds go directly to retiring
his IRS debt. They'll never be another Willy Nelson and

(06:15):
there will never be another album like this. Call Now.

Speaker 1 (06:20):
The heartstring tugging ad didn't generate as much revenue as
the IRS had hoped, especially since most of the early
proceeds went to the telemarketers promoting it. But sales picked
up once the album was released in stores in December
of nineteen ninety two. All told, sales of the IRS
tapes chipped away about three point six million dollars off

(06:41):
Nelson's tax debt, which wasn't anywhere close to what he owed. Nonetheless,
after the singer made a few more payments, the IRS
agreed to retire his remaining debt in nineteen ninety three.
Two years later, in an interview with Rolling Stone, Nelson
made clear that there were no hard feelings between he
and the government. Mentally, it was a breeze, he said.

(07:04):
They didn't bother me. They didn't come out and confiscate
anything other than that first day, and they didn't show
up at every gig and demand money. I appreciated that,
and we teamed up and put out a record. So
while mamas shouldn't let their babies grow up to be cowboys,
tax collectors might be all right, at least in Willie's book,

(07:28):
I'm Gay Blues Yay, And hopefully you now know a
little more about history. Today than you did yesterday. If
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(07:50):
iHeartMedia dot com. Thanks as always to Chandler Mays for
producing the show, and thanks to you for listening. I'll
see you back here again tomorrow for another other Day
in History class.