Ivanka Trump might get caught in the middle of two separate investigations currently underway involving President Trump and his businesses, the New York Times reports. New subpoenas have been issued by New York authorities over suspected tax fraud involving consulting fees paid to the First Daughter by the trump Organization before Mr. Trump became President.
These fees are suspected of being part of an attempt to funnel money to relatives and associates of President Trump’s while illegally using them as tax write-offs by declaring the fees business expenses.
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Manhattan District Attorney Cyrus Vance is conducting a criminal investigation in parallel to a civil probe underway by New York State Attorney General Letitia James. Both are Democrats.
The New York Times had previously reported that its investigation found that Ivanka Trump in 2017 reported receiving payments from the consulting company TTT Consulting L.L.C she co-owned totaling $747,622. This figure matched exactly the consulting fees claimed as tax deductions by the Trump Organization for hotel projects in Hawaii and Vancouver, British Columbia. The Trump Organization wrote off a total of $26 million in expenses listed as consulting fees.
The problem for Ivanka Trump is that she was officially listed as an executive officer of the Trump companies when her own firm received these payments. So tax officials and investors will want to know why she needed to be paid twice. While such fees are allowable as write-offs, the Internal Revenue Service requires that they based on the going rate for such work and proof that the services in question were actually provided.
So why would Donald Trump make such payments to his daughter?
Well, by doing so he could give her money at the expense of his business while writing such a gift off as a business expense. This is illegal because it amounts to both tax fraud and basically stealing from a firm’s investors.
It is tax fraud even when no tax writes off is taken, however. The U.S. currently requires a gift tax of up to 40% on gifts of cash or items worth more than $15,000. The tax is levied on the giver. The gift tax was implemented to prevent wealthy people from avoiding estate taxes which would be levied on their wealth after they die.
So hiding such a gift as payment for services is a fraud. Ironically, the New York Times previously reported that Donald Trump’s father Fred Trump did the same thing before he died, funneling money to his children through shell corporations.
Ivanka Trump of course accuses New York officials of harassment responded. She tweeted, “This is harassment pure and simple. This ‘inquiry’ by NYC democrats is 100% motivated by politics, publicity and rage. They know very well that there’s nothing here and that there was no tax benefit whatsoever. These politicians are simply ruthless.” She also called it a fishing expedition.
This fishing expedition is very clearly part of a continued political vendetta ⤵️https://t.co/Gw0IKOWdeQ
— Ivanka Trump (@IvankaTrump) November 20, 2020
Alan Garten, general counsel for the Trump Organization, said in a statement that “this is just the latest fishing expedition in an ongoing attempt to harass the company.” “Everything was done in strict compliance with applicable law and under the advice of counsel and tax experts,” he added. “All applicable taxes were paid and no party received any undue benefit.”
President Trump has dismissed such investigations as nothing more than politically motivated witch hunts.
But New York Attorney General James stated earlier this month, “The outcome of the election will have no impact on our investigations. No one is above the law. We will just follow the facts and the evidence, wherever they lead us.”