Construction firm owner gets 2-year sentence for not reporting $4.8M to IRS

By: Sharjeel Sohaib

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Feb 20, 2023

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  • The owner of Mass Development Inc. (MDI), a Chino-based construction company in Inland Empire, has been sentenced to 24 months in federal prison for filing false tax returns.
  • The false tax returns didn’t report over $4.8 million in income over five years, resulting in a failure to pay $1.6 million in taxes due to the IRS.
  • Chen, the owner, pleaded guilty in September 2022 to aiding and assisting in the preparation of a false income tax return and has also been ordered to pay $1,642,935 in restitution by United States District Judge Marc C. Scarsi.

Liang Tai Chen, aged 62, the owner of Mass Development Inc. (MDI), a construction company based in Chino, Inland Empire, has been sentenced to 24 months in federal prison for filing false tax returns. This false income reporting continued for five years, resulting in Chen’s failure to pay $1.6 million in taxes due to the IRS.

In addition to the prison sentence, United States District Judge Marc C. Scarsi has ordered Chen to pay restitution of $1,642,935. Chen had already pleaded guilty to aiding and assisting in preparing a false income tax return in September 2022.

Business Owner’s False Reporting

About MDI’s federal tax returns, Liang Tai Chen provided a tax return preparer with statements from the company’s business bank account, stating that all of MDI’s income was deposited into the account. However, Chen had cashed many business checks payable to MDI without telling the return preparer. This caused MDI to falsely report its gross receipts to the IRS, resulting in an underpayment of federal taxes amounting to $1,642,935.

Difference between Intentional and Unintentional Concealment

Details of the case suggest that Chen’s behavior resulted from his intentional choices and actions over several years. Despite being a mature and highly educated adult with a master’s degree and a degree in civil engineering, he repeatedly filed false tax returns, resulting in his failure to pay the taxes due to the IRS. This conduct led to his sentencing of 24 months in federal prison and ordered restitution.

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