Two Kent dentists who conspired to avoid more than $460,000 in income taxes pleaded guilty Friday in U.S. District Court in Seattle to filing a false tax return.
Dr. Mike Hsieh, 48, of Bellevue, and Dr. Christine Chen, 45, of Renton, who own Comfort Family Dentistry, Inc., along Kent-Kangley Road in Kent, took steps between 2007 and 2014 to illegally hide their income from the IRS to reduce their tax obligation, according to an U.S. Department of Justice news release.
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.
U.S. District Judge Richard A. Jones scheduled sentencing for Nov. 22. 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 IRS Criminal Investigation.
Hsieh has more than 10 years of experience in dental practice, according to the Comfort Family Dentistry website. He is a graduate of the UCLA School of Dentistry with a doctor of dental surgery degree. Hsieh started his career in Vancouver, British Columbia where he was a general practitioner as well as a clinical instructor at the University of British Columbia Faculty of Dentistry for four years.
Chen grew up in Southern California and majored in biology at UCLA, according to the Comfort Family Dentistry website. After graduating summa cum laude from UCLA in 1996, she completed four years at the University of Southern California School of Dentistry, graduating top of her class in 2001 with a doctorate in dental surgery degree. She has been in private practice in Washington state since 2001.