A.N.
My daughter too went through a lying phase. She would lie even when she knew I knew she did something. From what I've read, often kids up to this age may not be meaning to lie. They are simply saying what they WISH was true (that they had not done the naughty behavior that you're accusing them of). I've read that it's better not to confront them in a way you know will lead to a lie. While you may be tempted to ask "Did you write on your face with marker?" (to which he may say "no", because this is the reality he wishes for at that point) - instead say, "Honey, it was fine to write on the balloon with marker. That was really funny. But we don't want to get marker on our faces. Let's go and wash that off." You're telling him it's not acceptable and rectifying the situation, but you're not being as accusatory and causing him to go on defense. It might help to keep the situation from escalating. I hope this helps. And keep in mind that this phase too shall pass...
:)