I’ll be waiting for your proof.
From the Times article:
Rather, there appears to be a closer-to-home explanation for at least some of the fees: Mr. Trump reduced his taxable income by treating a family member as a consultant, and then deducting the fee as a cost of doing business.
The “consultants” are not identified in the tax records. But evidence of this arrangement was gleaned by comparing the confidential tax records to the financial disclosures Ivanka Trump filed when she joined the White House staff in 2017. Ms. Trump 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 Vancouver and Hawaii.
Ms. Trump had been an executive officer of the Trump companies that received profits from and paid the consulting fees for both projects — meaning she appears to have been treated as a consultant on the same hotel deals that she helped manage as part of her job at her father’s business.
When asked about the arrangement, the Trump Organization lawyer, Mr. Garten, did not comment.
Employers can deduct consulting fees as a business expense and also avoid the withholding taxes that apply to wages. To claim the deduction, the consulting arrangement must be an “ordinary and necessary” part of running the business, with fees that are reasonable and market-based, according to the I.R.S. The recipient of the fees is still required to pay income tax.
The I.R.S. has pursued civil penalties against some business owners who devised schemes to avoid taxes by paying exorbitant fees to related parties who were not in fact independent contractors. A 2011 tax court case centered on the I.R.S.’s denial of almost $3 million in deductions for consulting fees the partners in an Illinois accounting firm paid themselves via corporations they created. The court concluded that the partners had structured the fees to “distribute profits, not to compensate for services.”
