In this episode of Final Notice, Jason Carr breaks down the Candies Goode-McCoy case, a Las Vegas business owner who filed more than 1,200 tax returns fraudulently claiming nearly $98 million in COVID-19 Employee Retention Credits, triggered $33 million in undeserved IRS payouts, and was sentenced to 54 months in prison.
Show Notes:
John Kungu owned a successful business, Advanced Nursing Care, in Townsend, Delaware. He also owed the IRS nearly $1.2 million, and he decided to lie his way out of it.
In this episode of Final Notice, tax attorney Jason Carr breaks down how Kungu ran his scheme on two fronts: filing false personal and corporate returns that disguised hundreds of thousands of dollars in personal spending as business expenses, then submitting multiple false sworn statements to the IRS during collections claiming he couldn’t pay.
The defining moment: Kungu offered to settle his entire tax debt for $35,000, said he’d need a loan to do it, and was holding more than $5.1 million in hidden accounts the whole time. He was sentenced to 18 months in federal prison, three years of supervised release, a $75,000 fine, and full restitution of $1,186,573.62.
Jason explains the legitimate tools Kungu ignored: the Offer in Compromise, installment agreements, currently-not-collectible status, penalty abatement, and real tax planning, and why every one of them starts with honest, fully disclosed financials.
This episode is for business owners, taxpayers facing IRS collections, bookkeepers, enrolled agents, CPAs, and tax preparers who want to understand exactly where an unpaid tax bill turns into a criminal case.
Key Takeaways
- A refundable credit is the most heavily scrutinized money in the tax code. A refund that sounds too good to be true usually is.
- The ERC was a legitimate program with specific eligibility rules: a government-ordered shutdown or a significant decline in gross receipts in qualifying periods.
- High-volume claims with repeated credits create detectable patterns. The IRS shifted most of its exam staff to audit ERC claims.
- Lifestyle that doesn’t match reported income is a classic red flag investigators follow every time.
- Tax preparers should build practices on eligibility analysis, documentation, and defensible positions, not refund size.
- If you already claimed a credit you can’t support, voluntary correction through the ERC Voluntary Disclosure Program or claim withdrawal is far better than waiting for the IRS to find it.
- The goal is to keep the matter in the civil tax resolution lane, through amended returns, audit defense, and penalty relief, before it becomes a criminal case.
Resources Mentioned
DOJ sentencing release: Business Owner Sentenced to Over Four Years in Prison for $100M COVID-19 Tax Credit Scheme
DOJ District of Nevada release: Business Owner Sentenced to Over Four Years in Prison for $100M COVID-19 Tax Credit Scheme
DOJ guilty plea release: Nevada Woman Pleads Guilty to Fraudulently Seeking Nearly $100M in COVID-19 Employment Tax Credits
Related co-conspirator (IRS-CI): Nevada businesswoman pleads guilty to multimillion dollar scheme to fraudulently claim COVID-19 tax credits
The Law Office of Jason Carr, PLLC: https://carrtaxlaw.com