Since you have additional witnesses, i.e. your parents and a friend, I doubt that your sister's lying. The votes are in and it seems that those closest to you have decided that this is a problem that needs fixed sooner rather than later.
The best thing you could do right now, however, is order TheraBreath Basics (Toothpaste and Oral Rinse) and follow the instructions for use. It worked for me... I believe it will work for you.