The IRS is cracking down on widespread fraud within pandemic assistance programs, including the Employee Retention Credit and paid leave credits.
Quick Takes
- Candies Goode-McCoy pleaded guilty to defrauding the government of $100 million in pandemic tax credits.
- Goode-McCoy filed over 1,200 false returns over 16 months seeking nearly $100 million.
- The IRS paid out $33 million, with Goode-McCoy pocketing $1.3 million.
- The DOJ and IRS are tackling fraudulent activity, pursuing 450 criminal cases nationwide.
- Legislators consider repealing the Employee Retention Credit to combat further fraud.
IRS Investigates Fraudulent Pandemic Tax Activities
Candies Goode-McCoy, a Las Vegas resident, pleaded guilty to charges of conspiring to defraud the U.S. government through pandemic assistance programs designed to support struggling businesses. Authorities uncovered a scheme where Goode-McCoy submitted over 1,200 fraudulent tax returns within 16 months, seeking nearly $100 million from programs like the Employee Retention Credit and paid leave credits. The IRS paid out approximately $33 million in refunds, only to discover the vast majority of those returns were not eligible for the credits claimed.
Goode-McCoy stands accused of using the fraudulently obtained funds for extravagant pursuits, including gambling, luxury vacations, sports cars, and high-end designer apparel. As part of a plea agreement, she has agreed to return a significant portion of the funds acquired illegally, but now faces up to 10 years of incarceration upon her sentencing scheduled for February 2026.
IRS and DOJ Actions to Combat Tax Fraud
Investigations reveal alarming statistics of misuse, with the IRS reporting 10-20% of Employee Retention Credit applications as high-risk. As criminal cases in pandemic-related fraud reach 450 nationwide, the IRS has issued fresh guidelines to deter future attempts and assist businesses in genuine need. Meanwhile, in a proactive legislative effort, Congress is considering repealing the Employee Retention Credit altogether to address fraudulent claims and establish enhanced penalties.
Legislative Measures to Uphold Integrity
The proposed Employee Retention Tax Credit Repeal Act aims to guard national fiscal responsibility by terminating claim processes after January 31, 2024, while imposing stricter penalties for fraudulent conduct. As the IRS and DOJ intensify efforts to reclaim misdirected funds, they emphasize honest compliance by taxpayers and businesses to support legitimate economic recovery amid these challenging times.
The collaboration of legislative, judicial, and tax authorities promises to not only rectify economic damage from fraudulent pandemic claims but also strengthen oversight mechanisms for future financial integrity.
Sources:
- Woman Pleads Guilty in Covid Tax Credit Scheme That Netted $33 Million – The New York Times
- Nevada Woman Pleads Guilty to Nearly $100 Million COVID-19 Tax Credit Fraud
