Two Kent, Washington dentists who conspired to avoid more than $460,000 in income taxes pleaded guilty today in U.S. District Court in Seattle to filing a false tax return, announced U.S. Attorney Brian T. Moran. MIKE HSIEH, 48, of Bellevue, Washington, and CHRISTINE CHEN 45, of Renton, Washington, own Comfort Family Dentistry Inc. Between 2007 and 2014, the two took steps to illegally hide their income from the IRS to reduce their tax obligation. U.S. District Judge Richard A. Jones scheduled sentencing for November 22, 2019.
According to records filed in the case, HSIEH and CHEN maintained two sets of financial statements for the business – one showing the actual expenses, and another showing inflated expenses. The fraudulent expense statements were given to their accountant for tax preparation. The pair also established a bank account that was not disclosed to the tax preparer. Patient fees deposited into the account were not reported as income. Finally, the pair took cash proceeds from the dental practice and never reported that income to the accountant or on their taxes.
For tax year 2013, HSIEH admits he reported a taxable income of $232,753, when it was really more than $100,000 higher. HSIEH should have paid taxes on income of $348,663. For tax year 2013, CHEN reported income of $319,131 when her true income was $425,679. For all the tax years between 2007 and 2014 they each admit failing to pay about $231,000 in taxes that they should have paid.
HSIEH and CHEN have agreed to make restitution of slightly more than $231,000 each to the U.S. and pay any additional tax, penalties and interest.
Filing a false tax return is punishable by up to three years in prison and a $250,000 fine.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Matthew Diggs.
Press contact for the U.S. Attorney’s Office is Communications Director Emily Langlie at (206) 553-4110 or Emily.Langlie@usdoj.gov.