Robert J. Fedor, Esq., L.L.C.

Willie Nelson's tax woes foster unique agreement

Country crooner and musical legend Willie Nelson is known for many things. Among them is his well-publicized trouble with the Internal Revenue Service stemming from tax debt. Recently, Nelson turned 80 and reminiscent about his career, life and financial woes.

Even individuals who claim to dislike country music likely know who Willie Nelson is and would also be just as likely to hum along with one of his famous tunes. While Nelson has sold millions of albums and received awards and accolades for his musical accomplishments, he made headlines for a very different reason during the early 1990s.

Upon receiving poor financial advice, Nelson was accused of owning roughly $16.7 million to the IRS. While Nelson's defense attorney was able to negotiate terms which reduced the amount he owed to just $6 million, the country star still did not have the means to repay the back taxes, penalties and fines.

Seeking to recover monies owed to the federal government, IRS officials raided Nelson's home taking anything and nearly everything of value. Once the dust settled, all that remained in Nelson's possession were the clothes on his back and his guitar which the star fittingly named Trigger.

Upon selling off property, memorabilia and personal belongings to recover the $6 million debt, a large portion of the debt remained. Rather than spend time in jail for tax evasion, Nelson's defense attorney brokered a deal with the IRS in which the country star would use a portion of profits from a new album to repay his debt.

The album, entitled "The IRS Tapes: Who Will Buy My Memories?" enjoyed modest success and yielded $3.6 million to the IRS. Nelson was then able to repay the remainder of his tax debt after a lawsuit against his former financial advisor was settled.

While this case may be as unique as Nelson himself, it illustrates the importance of having a criminal defense attorney. Nelson's attorney was able to negotiate unique terms to repay the IRS debt and help Nelson avoid additional penalities and time behind bars.

Source: Forbs, "Willie Nelson, Who Saved His Career And His House With The IRS Tapes, Turns 80," Kelly Phillips, Erb, April 29, 2013