They Knew the Drill But Cheated the IRS (and got caught) Anyway

Dentists Mike Hsieh and Christine Chen, owners of Comfort Family Dentistry in Washington state, have pleaded guilty to filing a false tax return. Between 2007 and 2014 Hsieh and Chen kept two sets of financial statements for the business. One set of books showed actual expenses while another showed inflated expenses. They gave the fake statements to their accountant for tax preparation. The pair also had a bank account their accountant was not aware of and deposited patient fees into this account and did not report it as income. In addition, they didn’t report cash they took from the dental practice to their accountant or on their taxes.

For tax year 2013 Hsieh reported a taxable income of $232,753 when in reality he should have paid taxes on $348,663. For the same year Chen reported income of $319,131 but her actual income was $425,679. For tax years between 2007 and 2014 both Hsieh and Chen admit failing to pay about $231,000 in taxes.

They have agreed to make restitution of more than $231,000 each and pay any additional tax, penalties and interest, which their attorneys believe will be in the neighborhood of $300,000.

Attorneys argued for no jail time, citing the pair had lost their relationship with their bank, and their dental practice was dropped as a preferred provider by a major insurance carrier. The judge handed down a sentence of seven days in prison and 400 hours of community service.

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