Willie Nelson

He’s been making records for over 60 years and has cross-generational appeal like no other musician in history. But second to music, Willie Nelson is infamous for both his recreational use of marijuana and his tax troubles with the IRS. So what exactly happened to earn him that reputation?

In 1984, Nelson first came under investigation as the result of his investment in a tax shelter, which was recommended to him by a very large accounting firm. The result of that investigation was a tax bill for close to $17 million, but his lawyers negotiated it down to $6 million (the difference was primarily interest and penalties).

Unfortunately, Nelson didn’t have $6 million either. So in 1990, federal agents raided his home and took virtually everything he owned (except his guitar, Trigger), but it still wasn’t enough to cover his tax liability. So the IRS struck an unprecedented deal with the musician for his release of a compilation album with a profit-sharing agreement between Nelson and the US Treasury.

The album, entitled “The IRS Tapes: Who’ll Buy My Memories?”, was not quite as successful as everyone had hoped. But between those record sales and settlement money from his lawsuit against the accounting firm that originally recommended the tax shelter, Nelson finally cleared his debt with the IRS.

Josh Norris