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New London County resident Boulos Hanna of East Lyme, also known as "Paul Hanna," was sentenced on Wednesday, March 6 to ten months in prison for tax evasion, the US Attorney's Office for the District of Connecticut announced.
According to federal officials, Hanna owns New London-based dental practice Paul Hanna DMD PC and accepts fees from patients in personal checks, cash, and credit card payments. He also owns the building where his practice is located, which pays rent to Hanna individually.
For the 2000 through 2009 tax years, Hanna filed a Form 1040 individual income tax return for himself and his wife and paid the tax due and owing for each of those years, usually by having withholdings sufficient enough to cover his tax liability, officials said.
For the 2010 through 2012 tax years, Hanna again filed a Form 1040 for himself and his wife but did not pay the tax due and owing. Because of this, between April 2012 and 2017, he was subject to IRS collections enforcement for the 2010 through 2012 tax years. This included actions such as a lien being placed on his property and seized payments taken by levy, officials said.
Additionally, from 2013 to 2020, Hanna did not file personal federal income tax returns despite earning around $1.6 million in taxable income through his work as a dentist and from rental income.
He also tried evading the assessment of tax by paying himself "management fees" instead of a reasonable wage, only operating in cash by self-endorsing business checks to himself and cashing them to keep money out of his bank accounts, and paying personal expenses directly from his business accounts without reflecting the payments as income, according to officials.
These actions caused a loss to the IRS of over $244,000.
In addition to his prison sentence, Hanna will have to serve three years of supervised release. He was also ordered to pay $244,541 in restitution to the IRS as well as a $25,000 fine.
He will report to prison on Monday, May 6.
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