Willie Nelson and IRS hope for a hit (September 2, 1991)

New York Times
by:  Allison Leigh Cowan

Since Willie Nelson’s “Who’ll Buy My Memories? (The I.R.S. Tapes)” went on sale in June, it has sold only 160,000 copies. Under Mr. Nelson’s unusual arrangement with the Government, the collection of 25 songs must sell at least four million copies if it is to erase the singer-songwriter’s tax obligations.

“You got to be positive,” Mr. Nelson said in an telephone interview last week. “It’s not unheard of. I could sell three million albums. I’ve done it before.” He hopes sales will improve when the collection is available in stores; it is sold now only through phone orders advertised mostly on late-night television.

When Mr. Nelson was served last year with a $32 million bill for delinquent taxes — one of the largest ever presented to an individual — it seemed unlikely that anyone, even the cowboy heroes of his country and western songs, could rescue him.

But after months of negotiation with the Internal Revenue Service, Mr. Nelson made a deal that allowed him to bring out the collection — yours, for a limited time only, in cassette or compact disk, for $19.95 (plus $4 for shipping and handling), by dialing (800) IRS-TAPE.

The collection includes 25 examples of Mr. Nelson’s Texas twang and acoustic guitar. [ Review, page 26. ] The plan is to apply at least 15 cents from every $1 of sales to the musician’s back taxes.

Laurence Goldfein, Mr. Nelson’s business manager, said $9.95 of every $19.95 goes to the telemarketing company that is doing the distribution and marketing; about $2.40 goes to the Sony Corporation, Mr. Nelson’s record company, and $1.60 to other expenses.

Mr. Nelson’s cut is $6. Of that, $2 will go toward taxes he will owe on the recording’s expected profits. Three-quarters of what is left, or $3, goes to the I.R.S. to satisfy the delinquent tax bill, and the remaining $1 goes into a war chest to pay for the $45 million lawsuit Mr. Nelson filed last year against his former accountants at Price Waterhouse, who he contends put him into ill-advised tax shelters. The Government ruled against many of the tax shelters, and the I.R.S. later disallowed many of the tax benefits that Mr. Nelson claimed.

“It’ll sell a lot better once it hits the stores,” Mr. Nelson said. “All my million-sellers have come through the stores, so my fans are used to going through the stores. And I think a lot of them are waiting for it to hit the stores because when you pick up the phone, it costs $4 for handling. A lot of my fans don’t have credit cards and don’t want to wait four to six weeks for delivery.”

Valerie Thornton, an I.R.S. spokeswoman, sought to play down the unusual aspects of the arrangements with Mr. Nelson. “We try to work with taxpayers, not just Mr. Nelson,” she said. “And if we have to come up with some creative payment plan, that’s what we’re going to do, because it’s in everyone’s best interest.”

Mr. Nelson observed: “I thought they’d be crazy not to take it. The very fact they see a way to make a lot of money real quick made them go for it. They’re not interested in sitting around waiting 10 or 20 years for the money to trickle in.”

Last November, the Government seized Mr. Nelson’s homesteads in three states, padlocked his recording studio, and arranged to auction off his gold records and the family piano. By then, the Government had agreed to take about $15 million less than it originally wanted, but the 58-year-old singer and songwriter was having trouble coming up with cash. Running out of patience, the Government confiscated almost everything but his talent and beat-up Martin guitar.

The ailing real estate market in Texas meant that the sales of Mr. Nelson’s property reduced his debt by less than $2 million. That left Mr. Nelson with a seemingly insurmountable $15 million obligation. A Trove of Old Songs

But Mr. Nelson persuaded the I.R.S.’s district office in Austin, Tex., which is handling his case, to make a major concession in May. It granted him access to 35 years’ worth of seized tapes that he had squirreled away in his Spicewood, Tex., recording studio. Out of that trove, Mr. Nelson created “Who’ll Buy My Memories? (The I.R.S. Tapes).”

“It’s no overproduced album with millions of dollars of studio costs,” Mr. Nelson said. “But I think it’s the best stuff I got. I’ve always wanted to put out an album with me and my guitar doing my original songs. And my fans like it because it sounds like it’s just me in my living room singing.”

Mr. Nelson, considered a patriarch and icon of country music, made his reputation as a maverick and songwriter. In the early 1960’s, his “Night Life” became Ray Price’s theme song, and “Crazy” was a hit for Patsy Cline (and, years later, for Linda Ronstadt). Mr. Nelson’s “Funny How Time Slips Away” has been widely recorded.

While he also recorded as a singer, his grainy voice did not fit the increasingly slick style of Nashville productions, and in the 1970’s, Mr. Nelson moved back to Texas and began recording with more homespun backup. Albums That Tell Stories

He also began to make “concept albums,” in which songs were linked to tell stories, and in 1975, he released “Red-Headed Stranger,” an album about a traveling preacher that became a million-seller and ushered in a wave of Texas-based so-called outlaw country music.

“The Outlaws,” a sampler with Mr. Nelson, Waylon Jennings, Tompall Glaser and Jessi Colter released in 1976, also sold a million copies. And in 1978, Mr. Nelson released “Stardust,” an album of pop standards that also became a million-seller.

Mr. Nelson recorded few new songs of his own in the 1980’s, but his albums of tributes, duets and other writers’ songs continued to sell, and he has been one of country’s most popular touring performers.

Mr. Nelson said he had no qualms about making his tax problems a prominent part of the pitch. “Everybody knows about it anyway,” he said. “It’s been all over the scandal sheets. So why not take advantage of all that advertising?” ‘More Serious Problems’

Despite the hasty effort to produce and market the album, Mr. Nelson indicated that he was not letting the tax bill take over his life. “There are more serious problems in life than financial ones, and I’ve had a lot of those,” said Mr. Nelson, whose lyrics draw on a turbulent youth, three failed marriages and a period of professional drifting. “I’ve been broke before and will be again. Heartbroke? That’s serious. Lose a few bucks? That’s not.”

As for Mr. Nelson’s plan to use part of the proceeds for the costs of his suit against Price Waterhouse, a spokesman for the accounting firm was not amused. “Are you talking about the tax-aid album?” he said. “Anyone can spend their money anyway they want. But really.” Statement Is Issued

Later, the firm issued a statement that said in part: “Mr. Nelson and his advisers made all of the decisions regarding tax shelters in which Mr. Nelson invested. Those decisions and the economic consequences that resulted from those decisions were Mr. Nelson’s responsibility and not that of Price Waterhouse.”

According to the Recording Industry Association of America, only two of Mr. Nelson’s four dozen previous albums sold more than three million copies, “Stardust,” and “Always On My Mind.” Three others sold two million apiece and one sold one milion.

Mr. Nelson also has income from concerts and other deals that could make a contribution to his debt repayment. And he has a reservoir of good will that he can dip into, especially among farmers who remember the Farm Aid concerts he helped to organize in the 1980’s.

“If I didn’t like his music, I’d still buy the CD to help him because of the help he’s been to the farm organizations,” said Benny Bunting, a mushroom grower in Oak City, N.C.

Still, this is a recession. Are Mr. Nelson’s hard-core fans ready to help him out?

Marcia Gewelber of Santa Ana, Calif., said she skipped Mr. Nelson’s last California concert, saying the tickets were too expensive, since she had lost her job. But when it came to the $19.95 for “The I.R.S. Tapes,” she went into debt — and charged it. “He has given such love and joy to so many fans, and it just kills me that the man just lost everything,” she said.

Photo: The Internal Revenue Service auctioned a poster of Willie Nelson in January to help pay for his back taxes. (Associated Press) (pg. 26) Graph: “Willie Nelson’s Back-Tax Bite,” shows a breakdown of where the $19.95 spent on Willie Nelson’s new album, “Who’ll Buy My Memories” (The I.R.S. Tapes)” will go (Source: Richard A. Eisner & Company) (pg. 26)

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