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

• The IRS will settle a tax debt for less than you owe, but only through an Offer in Compromise built on fully disclosed, honest financials.
• Lying on a sworn collection statement is what converts a civil collections problem into a federal criminal case.
• Running personal spending through your business as "expenses" is not a deduction. It is evidence.
• Hiding records from your own bookkeeper or tax preparer is the moment to call a tax attorney, not to dig deeper.
• What you tell a tax attorney is privileged. What you tell your bookkeeper is not.
• A large unpaid tax bill is a solvable problem. The solution is disclosure plus strategy, never a sworn lie.

Resources Mentioned

• DOJ / IRS-CI case source: https://www.justice.gov/usao-de/pr/delaware-business-owner-sentenced-18-months-federal-prison-multi-year-tax-evasion-scheme
• The Law Office of Jason Carr, PLLC: https://carrtaxlaw.com