On Thursday, The New York Times reported that officials in New York State have opened a civil and a criminal fraud investigation into tax write-offs outgoing President Donald Trump took on various consulting fees he paid out, including some to his daughter Ivanka.
"The inquiries — a criminal investigation by the Manhattan district attorney, Cyrus R. Vance Jr., and a civil one by the state attorney general, Letitia James — are being conducted independently. But both offices issued subpoenas to the Trump Organization in recent weeks for records related to the fees," reported Danny Hakim, Mike McIntire, William K. Rashbaum and Ben Protess. "The subpoenas were the latest steps in the two investigations of the Trump Organization, and underscore the legal challenges awaiting the president when he leaves office in January. There is no indication that his daughter is a focus of either inquiry, which the Trump Organization has derided as politically motivated."
"Among the revelations was that Mr. Trump reduced his taxable income by deducting about $26 million in fees to unidentified consultants as a business expense on numerous projects between 2010 and 2018," said the report. "Some of those fees appear to have been paid to Ms. Trump, The Times found. On a 2017 disclosure she filed when joining the White House as a presidential adviser, she reported receiving payments from a consulting company she co-owned, totaling $747,622, that exactly matched consulting fees claimed as tax deductions by the Trump Organization for hotel projects in Hawaii and Vancouver, British Columbia."
The news comes after The Times published a series of reports into Trump's tax returns — which he spent years fighting to conceal from both investigators and the American people — that showed he was heavily in debt, losing money on most of his businesses, and strategically using his losses to pay little or nothing in income taxes from year to year.
"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," said the report. "It is not known if the I.R.S. has ever questioned the Trump Organization about the practice. The tax benefit to Mr. Trump from deducting the fees on his companies’ federal returns would also be reflected on his New York returns, making it of possible interest to the state."