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- March 04, 1991
- Vol. 35
- No. 8
The Taxman Is Taking Almost All Willie Nelson Owns; Now It's His Turn for Some Farm Aid
Nelson's rancor toward the pinstripe set is as easy to understand as his gratitude toward his comrades-in-coveralls. Last November his seven-year dispute with the Internal Revenue Service came to a nasty end when IRS agents seized most of Nelson's worldly possessions. At issue: $16.7 million in back taxes, penalties and interest.
At first everything seemed destined for the highest bidder: Nelson's Pedernales Country Club and Recording Studio near Austin, Texas; the 44-acre Dripping Springs ranch, where his daughter, Lana, 36, and her four children live; 20 other properties in four states; and most of Willie's instruments, recordings and memorabilia.
But then came help, much of it from farmers who remembered the millions Nelson had raised with his Farm Aid concerts over the years. Now, with at least some of his property protected, Nelson is on the rebound again, with an upcoming TV movie, Another Pair of Aces; a soon-to-premiere weekly show on the Outlaw Music Channel, a satellite network based in Austin; and a new album. Who'll Buy My Memories? due out soon. 'The support has really been fantastic," he says. "It takes something like this to find out just how many good friends you have."
Nelson's tax trouble started in 1984, when the IRS began looking into his returns stretching back to 1972. After years of investigation, the agency declared that Nelson had underpaid taxes for six years, primarily because of invalid deductions he had taken after investing in tax shelters the IRS subsequently nixed. Nelson protested, but last June a tax court ruled in favor of the government, and the musician grudgingly agreed to pay $6 million in back taxes, plus more than $10 million in penalties and interest.
Nelson asked the IRS to wait for payment until settlement of a $45 million lawsuit he has filed against his former accounting firm, Price Waterhouse, for allegedly leading him astray. The agency refused, and last November it seized most of what Nelson owned and announced plans for auctions.
When the news of Willie's troubles hit the streets, fans around the country reacted. Old friends staged benefit concerts in Austin, where a special Willie Nelson Appreciation Day was declared. The owner of a honky-tonk where Nelson once played raised more than $7,000. In Abbott and in Waco, Texas, backers established funds for Willie's benefit.
The help wasn't enough. With barely a dent made in Willie's massive tax bill, the IRS remained unmoved. But shortly before the first sale of his personal possessions, the agency allowed posters, musical instruments, gold and platinum records and other items of sentimental value to be bought for $7,000 by the visitor-funded Willie Nelson and Friends Showcase in Hendersonville, Tenn. "It was nice of the IRS to do that," says Nelson charitably. "It could have turned into a circus." At a second auction later that month, nobody offered the government's minimum acceptable bid of $575,478 for the country club and recording studio. "I guess they were too expensive or something," says an IRS spokesperson. The agency has yet to decide whether to hold another auction or return the property to Nelson.
But the biggest reprieve came on Jan. 29, when the government attempted to sell the Dripping Springs ranch, which Nelson has owned for 15 years and considers his family homestead. More than 40 farmers, some from as far away as South Dakota, appeared at the Hays County Courthouse to show support for Nelson. Farm activist Wayne Cryts of Puxico, Mo. (PEOPLE, April 21, 1986) made an impassioned speech at the auction, urging the crowd to boycott the bidding, while other farmers approached would-be buyers with quiet, face-to-face appeals.
"I said that Willie has brought hope to farmers, helped feed farm families and saved farmers from suicide by helping to fund agencies that help us," says Cryts. "I explained to the crowd that farmers know how it feels to lose your property." In the end, attorney John Arens, who represents the American Agriculture Movement, a Washington, D.C.-based lobbying group for family farmers, bought the ranch for $203,840 at the request of some AAM members. Arens says he will hold the property until the farmers can raise enough money to purchase it for Nelson or until the musician can buy it himself.
Meanwhile, Willie continues preparing for his courtroom showdown with Price Waterhouse. His lawyer, Jay Goldberg, charges that the firm did not adequately investigate the now-discredited tax shelters. Allen Young, an attorney for Price Waterhouse, insists, "We only did his accounting and taxes. We are not his investment advisers." Moreover, says Young, "when Mr. Nelson made the investments, in the early 1980s, very few people would have predicted that the courts would later rule that way."
The trial could begin as early as this summer. In the meantime, Willie, his girlfriend, Anne-Marie D'Angelo, in her mid-30s, and their two sons, Lukas Autry, 2, and Jacob Micah, 8 months, have taken up temporary residence in a friend's home near Austin. Willie is happy that his new double LP will allow him to be helped by his fans without taking their charity. "I can accept $19.95 or whatever since people are getting something in return," he says. And even as the IRS decides what to do with Nelson's unsold properties, he says he won't mourn most of his material losses. "A lot was bought by the Willie Nelson Showcase, the golf course and studio didn't sell, and my daughter's home was bought by farmers," says Willie. "The things that did sell were just things. So actually, I haven't lost anything."
—Charles E. Cohen, Anne Maier in Houston
- Anne Maier.
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