1 00:00:00,280 --> 00:00:04,880 Speaker 1: This Day in History Class is production of iHeartRadio. Hello 2 00:00:05,120 --> 00:00:08,680 Speaker 1: and welcome to This Day in History Class, a show 3 00:00:08,720 --> 00:00:11,600 Speaker 1: that brings you both the blue Skies and the Bloody 4 00:00:11,640 --> 00:00:16,720 Speaker 1: Mary Mornings of everyday history. I'm Gay Bluesier and today 5 00:00:17,040 --> 00:00:20,440 Speaker 1: we're talking about the infamous showdown between a country music 6 00:00:20,520 --> 00:00:30,640 Speaker 1: legend and the Internal Revenue Service. The day was November ninth, 7 00:00:30,840 --> 00:00:36,200 Speaker 1: nineteen ninety. The IRS seized Willie Nelson's properties in six 8 00:00:36,280 --> 00:00:40,879 Speaker 1: states for non payment of taxes. The federal agents who 9 00:00:40,960 --> 00:00:45,200 Speaker 1: rated his primary residence in Austin, Texas, also took possession 10 00:00:45,280 --> 00:00:49,640 Speaker 1: of thousands of Nelson's personal belongings. They took his instruments, 11 00:00:49,800 --> 00:00:54,160 Speaker 1: master recordings, and studio equipment, as well as his furniture, clothing, 12 00:00:54,320 --> 00:00:58,400 Speaker 1: and music memorabilia. The intention was to sell it all 13 00:00:58,440 --> 00:01:02,080 Speaker 1: at auction to help settle the country singer's multimillion dollar 14 00:01:02,160 --> 00:01:06,200 Speaker 1: tax bill, but things didn't turn out exactly as planned. 15 00:01:07,120 --> 00:01:11,040 Speaker 1: Willie Nelson's tax troubles began in nineteen eighty four when 16 00:01:11,040 --> 00:01:15,040 Speaker 1: the IRS began investigating a rather large deduction he had 17 00:01:15,080 --> 00:01:18,240 Speaker 1: claimed on his returns. It was for a series of 18 00:01:18,319 --> 00:01:21,840 Speaker 1: tax shelter investments which Nelson claimed had been promoted to 19 00:01:21,920 --> 00:01:25,720 Speaker 1: him by the Price Waterhouse accounting firm. The shelter in 20 00:01:25,800 --> 00:01:30,080 Speaker 1: question was eventually ruled illegal, and Nelson was assessed six 21 00:01:30,120 --> 00:01:33,920 Speaker 1: million dollars in unpaid taxes and ten million dollars in 22 00:01:34,000 --> 00:01:38,360 Speaker 1: interest and penalties. The singer sued Price Waterhouse for their 23 00:01:38,400 --> 00:01:42,000 Speaker 1: bad advice, and after many years of litigation, they reached 24 00:01:42,000 --> 00:01:45,480 Speaker 1: an undisclosed settlement. But in the meantime there was the 25 00:01:45,560 --> 00:01:49,360 Speaker 1: matter of the bill. Nelson's lawyers were able to talk 26 00:01:49,400 --> 00:01:53,320 Speaker 1: the IRS into waiving the interest and penalties in settling 27 00:01:53,360 --> 00:01:56,960 Speaker 1: for just the original six million in unpaid taxes. The 28 00:01:57,040 --> 00:02:01,360 Speaker 1: problem was Willie Nelson didn't have six million time. In fact, 29 00:02:01,600 --> 00:02:04,960 Speaker 1: according to his daughter Lana Quote, he didn't have one 30 00:02:05,040 --> 00:02:09,880 Speaker 1: million dollars. He probably didn't have thirty thousand. Turns out, 31 00:02:10,080 --> 00:02:13,320 Speaker 1: Nelson's sizeable earnings as one of the world's most popular 32 00:02:13,360 --> 00:02:17,320 Speaker 1: country music stars still wasn't enough to cover his free spending. 33 00:02:17,880 --> 00:02:21,440 Speaker 1: I did mention he had properties in six states. The 34 00:02:21,520 --> 00:02:24,720 Speaker 1: IRS agreed to put Nelson on an installment plan with 35 00:02:24,800 --> 00:02:28,440 Speaker 1: the interest and penalties reinstated, but the singer rarely made 36 00:02:28,520 --> 00:02:33,359 Speaker 1: payments and never very large ones. Meanwhile, interests and penalties 37 00:02:33,400 --> 00:02:37,600 Speaker 1: continued to accrue, and by nineteen ninety Nelson's tax debt 38 00:02:37,680 --> 00:02:42,639 Speaker 1: had just about doubled to thirty two million dollars. Negotiations 39 00:02:42,680 --> 00:02:45,360 Speaker 1: with the singer broke down once he saw the new bill, 40 00:02:45,800 --> 00:02:49,120 Speaker 1: prompting the IRS to drop the hammer on November ninth. 41 00:02:50,040 --> 00:02:52,760 Speaker 1: Nelson saw the writing on the wall in advance and 42 00:02:52,880 --> 00:02:55,640 Speaker 1: made sure he was away golfing in Hawaii when the 43 00:02:55,680 --> 00:02:59,720 Speaker 1: IRS agents came calling. He even had his daughter remove 44 00:02:59,800 --> 00:03:03,680 Speaker 1: his favorite guitar trigger from his Texas home and ship 45 00:03:03,720 --> 00:03:06,520 Speaker 1: it to him and Maui for safe keeping. As long 46 00:03:06,560 --> 00:03:09,120 Speaker 1: as I got my guitar, Nelson said at the time, 47 00:03:09,560 --> 00:03:12,799 Speaker 1: I'll be fine. He didn't know how right he was, 48 00:03:13,160 --> 00:03:15,440 Speaker 1: because not only did the singer get to keep his 49 00:03:15,480 --> 00:03:19,160 Speaker 1: beloved guitar, he got most of his other stuff back too. 50 00:03:19,400 --> 00:03:23,040 Speaker 1: The IRS held several public auctions in Texas to sell 51 00:03:23,080 --> 00:03:26,000 Speaker 1: off Nelson's property, but they didn't make nearly as much 52 00:03:26,080 --> 00:03:29,520 Speaker 1: money as expected. Most Texans refused to bid out of 53 00:03:29,560 --> 00:03:33,480 Speaker 1: respect for Nelson, and even though his ranch there was sold, 54 00:03:33,639 --> 00:03:35,920 Speaker 1: the bidder turned out to be a fan who would 55 00:03:35,920 --> 00:03:39,120 Speaker 1: shortly return the property to the singer. The money to 56 00:03:39,200 --> 00:03:41,280 Speaker 1: buy the house had been raised by a group of 57 00:03:41,320 --> 00:03:44,240 Speaker 1: farmers who wanted to pay Nelson back for his work 58 00:03:44,240 --> 00:03:49,000 Speaker 1: in organizing the farm Aide charity concerts. The IRS realized 59 00:03:49,040 --> 00:03:51,960 Speaker 1: the auctions were getting them nowhere, so they sold off 60 00:03:52,000 --> 00:03:54,920 Speaker 1: Nelson's remaining items and a lot priced at a mere 61 00:03:55,040 --> 00:03:59,080 Speaker 1: seven thousand dollars. Once again, though the buyer was a friend, 62 00:03:59,400 --> 00:04:02,480 Speaker 1: ensuring that Nelson would get most of his prized possessions 63 00:04:02,520 --> 00:04:06,720 Speaker 1: back in addition to his Texas home. That said, all 64 00:04:06,800 --> 00:04:11,320 Speaker 1: those low ball bids meant that the singer's debt remained unresolved. 65 00:04:12,040 --> 00:04:15,080 Speaker 1: Nelson made a few substantial good faith payments over the 66 00:04:15,080 --> 00:04:18,320 Speaker 1: next few years, and in nineteen ninety one he worked 67 00:04:18,360 --> 00:04:21,560 Speaker 1: out a rather unusual deal with the IRS to pay 68 00:04:21,560 --> 00:04:24,880 Speaker 1: off the rest. The singer would record a two disc 69 00:04:25,040 --> 00:04:28,240 Speaker 1: compilation album and use part of the proceeds to pay 70 00:04:28,279 --> 00:04:31,279 Speaker 1: down what he still owed. It was the first and 71 00:04:31,480 --> 00:04:34,800 Speaker 1: so far only deal of its kind. To keep the 72 00:04:34,839 --> 00:04:38,839 Speaker 1: recording costs low, Nelson decided to do stripped down acoustic 73 00:04:38,920 --> 00:04:41,839 Speaker 1: versions of some of his previously released songs and a 74 00:04:41,880 --> 00:04:46,240 Speaker 1: few new ones. The resulting album, called the IRS Tapes 75 00:04:46,360 --> 00:04:49,719 Speaker 1: Who Will Buy My Memories, features nothing but Nelson and 76 00:04:49,800 --> 00:04:53,400 Speaker 1: Trigger and include several songs that likely match the singer's 77 00:04:53,440 --> 00:04:56,400 Speaker 1: mood at the time, such as remember the good times 78 00:04:56,680 --> 00:04:58,039 Speaker 1: and what can you do to me? 79 00:04:58,160 --> 00:04:58,400 Speaker 2: Now? 80 00:04:59,480 --> 00:04:59,960 Speaker 1: Take a list? 81 00:05:00,760 --> 00:05:08,120 Speaker 2: What can you do to me now that you haven't 82 00:05:08,200 --> 00:05:18,279 Speaker 2: done to me already? You broke my pride and made 83 00:05:18,320 --> 00:05:28,440 Speaker 2: me cry out loud, So what can you do to 84 00:05:28,480 --> 00:05:30,719 Speaker 2: me now? 85 00:05:31,720 --> 00:05:34,960 Speaker 1: The IRS tapes were released on CD and cassette in 86 00:05:35,000 --> 00:05:38,000 Speaker 1: the summer of nineteen ninety one, but initially it was 87 00:05:38,040 --> 00:05:41,480 Speaker 1: sold only by phone and mail order. The album was 88 00:05:41,520 --> 00:05:45,640 Speaker 1: advertised on a Sappy TV infomercial and promised buyers the 89 00:05:45,760 --> 00:05:50,200 Speaker 1: quote satisfaction of helping one of America's greatest treasures, and 90 00:05:50,320 --> 00:05:53,160 Speaker 1: all for the low low price of nineteen ninety five 91 00:05:53,360 --> 00:05:55,160 Speaker 1: plus four dollars shipping and handling. 92 00:05:55,440 --> 00:05:58,279 Speaker 3: Willie Nelson. He's been there for those who needed him, 93 00:05:58,360 --> 00:06:02,360 Speaker 3: and he's helped thousands of people who cross this land. Now, 94 00:06:02,480 --> 00:06:05,080 Speaker 3: will he needs your help, and he's reaching out the 95 00:06:05,080 --> 00:06:08,840 Speaker 3: best way he can through his music. This is the 96 00:06:08,839 --> 00:06:12,120 Speaker 3: only Willy Nelson album where proceeds go directly to retiring 97 00:06:12,160 --> 00:06:15,680 Speaker 3: his IRS debt. They'll never be another Willy Nelson and 98 00:06:15,760 --> 00:06:19,320 Speaker 3: there will never be another album like this. Call Now. 99 00:06:20,520 --> 00:06:23,880 Speaker 1: The heartstring tugging ad didn't generate as much revenue as 100 00:06:23,880 --> 00:06:27,000 Speaker 1: the IRS had hoped, especially since most of the early 101 00:06:27,040 --> 00:06:30,919 Speaker 1: proceeds went to the telemarketers promoting it. But sales picked 102 00:06:31,000 --> 00:06:33,800 Speaker 1: up once the album was released in stores in December 103 00:06:33,839 --> 00:06:37,800 Speaker 1: of nineteen ninety two. All told, sales of the IRS 104 00:06:37,839 --> 00:06:41,279 Speaker 1: tapes chipped away about three point six million dollars off 105 00:06:41,360 --> 00:06:46,360 Speaker 1: Nelson's tax debt, which wasn't anywhere close to what he owed. Nonetheless, 106 00:06:46,560 --> 00:06:49,560 Speaker 1: after the singer made a few more payments, the IRS 107 00:06:49,600 --> 00:06:53,760 Speaker 1: agreed to retire his remaining debt in nineteen ninety three. 108 00:06:53,800 --> 00:06:57,480 Speaker 1: Two years later, in an interview with Rolling Stone, Nelson 109 00:06:57,520 --> 00:07:00,240 Speaker 1: made clear that there were no hard feelings between he 110 00:07:00,440 --> 00:07:03,960 Speaker 1: and the government. Mentally, it was a breeze, he said. 111 00:07:04,360 --> 00:07:07,240 Speaker 1: They didn't bother me. They didn't come out and confiscate 112 00:07:07,320 --> 00:07:10,120 Speaker 1: anything other than that first day, and they didn't show 113 00:07:10,200 --> 00:07:13,600 Speaker 1: up at every gig and demand money. I appreciated that, 114 00:07:14,080 --> 00:07:17,480 Speaker 1: and we teamed up and put out a record. So 115 00:07:17,560 --> 00:07:20,680 Speaker 1: while mamas shouldn't let their babies grow up to be cowboys, 116 00:07:21,120 --> 00:07:25,120 Speaker 1: tax collectors might be all right, at least in Willie's book, 117 00:07:28,200 --> 00:07:31,200 Speaker 1: I'm Gay Blues Yay, And hopefully you now know a 118 00:07:31,280 --> 00:07:35,520 Speaker 1: little more about history. Today than you did yesterday. If 119 00:07:35,520 --> 00:07:39,360 Speaker 1: you enjoyed today's show, consider keeping up with us on Twitter, Facebook, 120 00:07:39,400 --> 00:07:44,280 Speaker 1: and Instagram at TDI HC Show. You can also rate 121 00:07:44,320 --> 00:07:47,120 Speaker 1: and review the show on Apple Podcasts, or you can 122 00:07:47,120 --> 00:07:50,320 Speaker 1: get in touch directly by writing to This Day at 123 00:07:50,360 --> 00:07:54,840 Speaker 1: iHeartMedia dot com. Thanks as always to Chandler Mays for 124 00:07:54,840 --> 00:07:57,800 Speaker 1: producing the show, and thanks to you for listening. I'll 125 00:07:57,800 --> 00:08:00,480 Speaker 1: see you back here again tomorrow for another other Day 126 00:08:00,840 --> 00:08:01,920 Speaker 1: in History class.