Source: getty

Trump paid Ivanka $747,622 for 'consulting' and deducted it from his taxes per report


Sep. 29 2020, Updated 8:57 a.m. ET

According to a report by the New York Times, President Donald Trump appears to have paid his daughter, Ivanka Trump, $747,622 in "consulting fees," and then wrote it off on his taxes. The allegations came as part of a report which claimed that President Donald Trump paid just $750 in federal income tax in both 2016 and 2017.

Article continues below advertisement

The figure given to Ivanka was just part of $26 million in "unexplained 'consulting fees'" that President Trump wrote off from 2010 to 2018, according to The Times. While the tax fillings obtained by the publication do not name the consultants, reporters were able to match the payment with figures that Ivanka Trump reported in a financial disclosure in 2017.

Source: getty
Article continues below advertisement

According to The Trump Organization, the payments were related to hotel projects in Vancouver and Hawaii. Ivanka Trump "had been an executive officer of the Trump companies that received profits from and paid the consulting fees for both projects," which resulted in her being treated as a consultant in the same hotel deals she was responsible for managing.

While the IRS allows employers to deduct consultancy fees as a business expense, they must be an "ordinary and necessary" part of operating the business.

Michael Dambra, an associate professor of accounting and law at the University at Buffalo School of Management, told Insider that hitting related parties to do consultancy work is not uncommon.

Article continues below advertisement

"I would say for family companies it's a typical tax-avoidance strategy," Dambra said. "I wouldn't say there is anything unusual. What the Trump Organization would have to prove is that these consulting fees served a valid business purpose and that the prices were reasonable."

"I would say in defense to Trump here, there's nothing unreasonable about trying to minimize your taxes. We all do some form of that," he said. "The question at hand is whether this is defensible, and that's what we don't have information on."

Article continues below advertisement

According to tax records obtained by the publication, Trump also paid no income taxes at all in 10 of the previous 15 years.

The records reveal "chronic losses and years of tax avoidance," according to the paper. President Trump is the first President since the 1970s not to make his returns public, despite facing legal challenges to do so. The Times said the documents it obtained were "provided by sources with legal access to it."

The Times reports that President Trump was able to pay so little tax "largely because he reported losing much more money than he made." Trump's reports to the IRS "portray a businessman who takes in hundreds of millions of dollars a year yet racks up chronic losses that he aggressively employs to avoid paying taxes." In a public filing, President Trump said he made $434.9 million in 2018. The Times states that Trump instead made a loss of $47.4 million in 2018.

Article continues below advertisement

The paper goes on to claim that "most" of President Trump's businesses "report losing millions, if not tens of millions, of dollars year after year." 

"That equation is a key element of the alchemy of Mr. Trump's finances: using the proceeds of his celebrity to purchase and prop up risky businesses, then wielding their losses to avoid taxes," the report states.

Since becoming president, Trump has received money from "lobbyists, foreign officials and others seeking face time, access or favour," the paper alleges. The Times reports that Trump made $73 million in revenue from abroad during his first two years at the White House.

Some of that money came "from licensing deals in countries with authoritarian-leaning leaders or thorny geopolitics." The Times alleges that Trump netted $3 million from the Philippines, $2.3 million from India and $1 million from Turkey. 

Article continues below advertisement

The Trump Organization denied the report in a statement, saying that "most, if not all, of the facts appear to be inaccurate. Over the past decade, President Trump has paid tens of millions of dollars in personal taxes to the federal government, including paying millions in personal taxes since announcing his candidacy in 2015."

President Trump called the claims "fake news."

"Actually I paid tax. And you'll see that as soon as my tax returns - it's under audit, they've been under audit for a long time," he said. "The IRS [Internal Revenue Service] does not treat me well… they treat me very badly."

Article continues below advertisement

In a statement, House Speaker Nancy Pelosi wrote: “The New York Times reporting provides a window into the extraordinary measures that President Trump has used to game the tax code and avoid paying his fair share of taxes, while hard-working Americans are."

“This report provides further evidence of the clear need for the Ways and Means lawsuit spearheaded by Chairman Neal to access Trump’s tax returns and ensure the presidential audit program is functioning effectively, without improper influence."

“With the leadership of Representatives Anna Eshoo, Bill Pascrell, Lloyd Doggett and John Sarbanes, the House passed a requirement that presidents disclose their personal and business tax returns as part of our H.R. 1, the For The People Act." 

“It is a sign of President Trump’s disdain for America’s working families that he has spent years abusing the tax code while passing a GOP Tax Scam for the rich that gives 83 percent of the benefits to the wealthiest 1 percent.”


Latest News News and Updates

    Opt-out of personalized ads

    © Copyright 2024 Megaphone. Megaphone is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.