The IRS Tapes: How Willie Nelson Taught us To Care About Stuff That Matters, Not Money
In honor of the Texas hero's 80th Birthday celebration and legendary 4th of July Picnic, we're celebrating Willie Nelson Week here on DC9 at Night. Check back for interviews, retrospectives and more.
Saying Willie Nelson is a Texas icon is like claiming the sun is hot. It's simply understood. Willie's appeal is as diverse as the student population at DISD. Artists like Snoop Dogg, Kid Rock, Keith Richards, and Santana have all jammed with the small-town country boy. Willie's been playing his signature guitar, Trigger, in front of crowds that span generations of Texas families for more than 50 years. But what is it about Willie Nelson that turns people not simply into fans but Willie's extended family?
Just ask any random person on the street in Texas about Willie Nelson, and you'll likely get stories about ol' Willie playing a benefit concert for a hometown bank facing financial ruin, playing or gathering folk legends like Neil Young to play a benefit show for American farmers or offering weed to baby Jesus. Willie's songs are so engrained into our culture that people who don't normally listen to country music appreciate the Red-headed Stranger's gritty voice, and some can even name a few of his more popular songs: "Crazy," "City of New Orleans" and "Highway Man" are just a few of the many dropped like names at a Hollywood party in places such as Billy Bob's in Fort Worth, Porky's in Denton and Poodle's Hilltop Bar and Grill just outside of Austin.
Nelson with his long hair, his beat up old guitar and his blue jean and t-shirt attire has been singing songs about Texas in more than 200 albums. Songs like "Dallas," "Who Do I Know in Dallas" and "Remember the Alamo," "Beautiful Texas," "There's a Little Bit of Everything in Texas," "San Antonio Rose" and "Down at the Corner Beer Joint" make ol' Willie as American as apple pie and Jack Daniels. And maybe that's part of the reason why the IRS agreed to his crazy plan of writing an album for the sole reason of paying his back taxes and a $32 million fine attached to the government's price tag.
After a stint in Nashville in the '60s, Willie went back home to Texas, where he produced some of his most memorable albums, including Shotgun Willie (1973), Phases and Stages (1974) and Red Headed Stranger (1975), a hit on both country and rock charts. But more hits means more money, so Willie's new handler Mark Rothbaum recommended investing money in a tax shelter, a legitimate plan as long as one avoids portfolios with the word "western" in their names.
Willie wasn't sure about the idea, but tax shelters do provide taxpayers with the opportunity to avoid taxes by investing in accounts that aren't heavily taxed, charitable donations or transactions that lower taxable income. And some shelters (retirement accounts or side businesses) can even produce income. In 1980, Willie's accounting firm Price Waterhouse began investing his money into a margin account portfolio of First Western. But what Willie didn't know was that the IRS had questioned First Western investors before setting its evil eye on Willie's tax returns. IRS agents soon noticed the deduction for tax shelter investments, disallowed them and "assessed" $6 million in taxes and $10 million in interest and penalties.
For the rest of the '80s, the threat of IRS agents raiding Willie's house loomed over him as he joined the Highwaymen - Waylon Jennings, Johnny Cash and Kris Kristofferson - a country super group that took outlaw country overseas, won a Grammy Award for "On the Road Again" and one more for "Always on my Mind," one of the greatest love songs ever written. He also organized the first Farm Aid concert, which has now raised more than $30 million, with Neil Young and John Mellencamp.
Yet, despite his success, Willie's album sales were falling while his tax debt was rising, reaching $32 million by the turn of the decade. In 1990, the IRS began seizing his instruments, memorabilia, properties and other recordings. Willie sold his publishing company - his songs, his royalties - to Fuji Pacific for $2.27 million. And after paying his bank loan, other tax complaints and investors, Willie sold his legacy of award-winning hits but still owed millions. The aging country legend, however, wasn't worried and later told The New York Times:
"There are more serious problems in life than financial ones, and I've had a lot of those. I've been broke before and will be again. Heartbroke? That's serious. Lose a few bucks? That's not."