The Ivanka Trump Tax Scandal Explained

If President Trump's tax scandal has taught the average American anything, it's that this guy pays way too much for a cut, color, and blowout (via Cosmopolitan). But in all seriousness, when a bombshell report comes out by The New York Times that our President hasn't paid federal income taxes for over a decade, and when he actually has paid, it was a measly $750 in 2016 and 2017, there's not much we can do. The moral (or rather immoral) truth to this story is that it pays to have money, especially if you can afford to write off a team of consultants. And if you're the daughter of said person, it pays doubly (via HuffPost).

Conveniently buried in the headlines between the potential tax evasion and the debate debacle is how Ivanka Trump not only helped her father pay out $750,000 between 2010 and 2018 as "consulting fees," but how she also happened to get paid that exact amount in consulting fees for a job she was already hired and being paid to do (via CNN).

If Ivanka Trump's consulting fees are deemed fraudulent she could face prosecution

According to The New York Times report, between 2010 and 2018, Donald Trump wrote off a whopping $26 million in "consulting fees" which are not itemized in his taxes. When taking a deeper dive into the numbers, Times' reporters were able to match a $747,622 payment Ivanka Trump received in 2017 from a consulting company called "TTT Consulting," which she co-owned with other family members, with that exact amount written off as tax deductions for consulting fees on two Trump Organization hotel projects in Vancouver and Hawaii (via Salon). 

The problem with the matching number is that Ivanka Trump was already a top executive at the Trump Organization being paid to work those deals. That means she actually got paid twice — her regular salary plus three-quarters of a million dollars in consulting fees. There are still over $25 million in consulting fees unaccounted for, which should leave you wondering if other offspring or even Ivanka herself benefitted in a similar manner over the course of those 8 years.

Nick Akerman, a former prosecutor during the Watergate scandal, explained in an interview with CNN, that the issue at hand isn't tax avoidance which can be classified as trying to get the most deductions and pay the least under the tax code — instead, it's tax fraud which is a federal crime. He explains, "Tax fraud is lying about what your income was. Lying about what your deductions are."

President Trump may have been following in his father's footsteps

Donald Trump's father, Fred Trump, notoriously passed assets to his children in a similarly illegal scheme in order to avoid a gift tax and move assets out of his estate without financial repercussions, and in this case, the apple may not fall far from the tree. Ackerman explains, "There's no legitimate reason for her to get those consulting fees since she was being paid already as a Trump, um, employee. The only possible reason for doing this is to somehow move money around so that it wouldn't be taxed to Donald Trump but would in effect go on Ivanka Trump's tax return who probably had certain losses that she could take against it. So in the end the government gets zero dollars."

Feeling frustrated, a little confused, and a lot cheated? It gets worse. The Department of Justice says a sitting president cannot be indicted. That means tax fraud charges need to be brought up after he's no longer holding office. What do you think the chances are this will all get pushed under the rug and explained away with possibly a fine or two by the IRS?