The litany of prosecutions President Donald Trump may be facing when he turns back into a plain old real estate magnate frog on Jan. 20, 2021, just got a little longer, the New York Times reported Friday. Trump’s unseemly business dealings have manifested themselves in some murky tax filings, both of which have been a source of interest for New York state investigators: Manhattan District Attorney Cyrus Vance Jr. is conducting a criminal investigation while state Attorney General Letitia James carries out a civil one. Both probes, the Times reports, have recently expanded to include tens of millions of dollars in tax write-offs by Trump and his business, the Trump Organization, including deductions taken for paying his daughter Ivanka as a consultant while she was simultaneously on the payroll of the company as an executive officer. The investigations have ramped up of late, and, the Times reports, subpoenas have been issued to the Trump Organization.
Trump has paid essentially no taxes for decades by exploiting tax loopholes that allowed him to cover his substantial business losses, but also by deploying accounting methods that look an awful lot like fraud. To help keep his tax bill close to nonexistent, the Times now reports Trump took $26 million in tax deductions from 2010 to 2018 for fees paid to unidentified consultants that Trump classified as business expenses. When it comes to Ivanka, $747,622 in payments were made to Trump’s daughter through the consulting company TTT Consulting LLC, of which Ivanka is a co-owner. Ivanka disclosed the income when joining the White House in 2017. The exact same amount was listed in the Trump Organization’s tax deductions for a pair of hotel projects.
“While companies can deduct professional fees, the Internal Revenue Service requires that consulting arrangements be market-based and reasonable, as well as ‘ordinary and necessary’ to running a business,” the Times notes. “The I.R.S. has sometimes rejected attempts to write off consulting fees if they were meant to avoid taxes and did not reflect arms-length business relationships.” While these federal returns would fall under the jurisdiction of the federal government, the Times points out that they would also be included Trump’s New York state returns, which would provide an avenue for state-level prosecution.