Sour Note for Willie Nelson--IRS Says He Owes $2.2 Million

Willie Nelson, one of former President Jimmy Carter’s favorite country music stars, has been accused of civil tax fraud by the Internal Revenue Service, which is seeking more than $2.2 million in unpaid taxes and penalties, according to documents on file with the U.S. Tax Court.

The IRS says Nelson owes more than $1.5 million in taxes from 1975 through 1978, a period for which he is accused of understating his taxable income through unreported earnings and improper deductions.

An IRS notice, sent last October to the singer and his wife, Connie, said all or part of the alleged underpayment “is due to fraud.”

For the alleged fraud, the IRS assessed a 50% penalty of $730,597.

The agency assessed another penalty of more than $23,000 for 1978, charging that part of the underpayment of tax for that year “is due to negligence or intentional disregard” of federal tax rules and regulations.

In papers Nelson filed last month in U.S. Tax Court in Washington, he denied that he was guilty of fraud.

Chuck Meadows, the lawyer who represents the 54-year-old singer from Austin, Tex., said: “Our position is that the matter is in the courts and we’ll let it be resolved there.”