Flashback: Willie Nelson Settles IRS Tax Debt

Singer pays off millions with TV ads and 'Who'll Buy My Memories' album

In 2003, Willie Nelson poked fun at his IRS woes in an ad for H&R Block.

Thanks to songs he penned throughout the late Fifties and well into the Sixties, Willie Nelson was becoming one of Nashville's best-known songwriters and a wealthy man. After his Nashville home burned down, he moved back to Texas in 1970 and soon became nothing less than a household name, earning a multitude of honors for his music and expanding his brand by appearing in films, including The Electric Horseman and Honeysuckle Rose. His empire, however, was soon to crumble – albeit temporarily.

On November 9th, 1990, federal agents seized Nelson's properties in six states and assets which included boxes of master tapes, touring equipment, gold and platinum records and clothes. The IRS, estimating a total tax debt of $32 million, alleged that much of his income was hidden in tax shelters – a result, the singer said, of mismanaged earnings and bad advice from his accountants. After seizing his assets, the IRS charged the entertainer with a debt of $16.7 million - a whopping $10.2 million of which was in interest and penalties alone. Nelson, who had an inkling that trouble was looming, had already his daughter Lana send his beloved guitar, Trigger, to Maui for safe keeping. Afraid the door receipts from his shows would also be taken to satisfy the debt, Nelson even stopped doing live shows for a while.

Throughout the ordeal, Nelson did his best to keep his sense of humor, even revealing in his 2015 autobiography, It's a Long Story, that during two days of questioning with IRS agents in Austin he purposely parked his Honeysuckle Rose II bus outside the offices and spent lunch hours during the meetings doing autograph sessions for the fans that had gathered, including several IRS clerks and secretaries.

At the conclusion of those meetings, on February 2nd, 1993, 24 years ago today, Nelson and the IRS settled the debt for $9 million, more than $3 million of which had already been paid off. In an effort to wipe out the remainder of the debt, Nelson had earlier come up with the idea to compile a two-disc collection of acoustic renditions of some of his songs, featuring just Nelson and his guitar – to keep recording costs as low as possible. The material on The IRS Tapes: Who'll Buy My Memories, released in 1992, matched Nelson's somber mood in light of the situation, with such songs as "What Can You Do to Me Now," "Permanently Lonely" and "Remember the Good Times." The LP, which initially sold for $19.95 via an infomercial, didn't sell as well as it could or should have, however, due to Nelson wearing a T-shirt during the TV spot with the wrong phone number printed on it.

A decade later, Nelson, who had already appeared in a TV ad for Taco Bell to cut down the tax bill, poked fun at the whole predicament in a hilarious commercial for tax preparers H&R Block. The spot, which aired during the 2003 Super Bowl implied that he had pretty much resorted to doing just about whatever he could to take care of his debts, including taking part in a commercial during which the bearded bard of country music, his face lathered in "Smoothie shaving cream," exclaims, "My face is burning!"

The entire ordeal was not as, well, taxing on the iconic Texan as it could have been. "Mentally it was a breeze," he told Rolling Stone in 1995. "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."

Attesting to the Zen attitude he had adopted about it all, the T-shirt he wore on LP cover, which featured Nelson in a black cowboy hat, summed up the situation nicely in just two words: "Shit happens."