LFM Partner Daren H. Firestone explains NY investigation of Trump tax write-offs

Nov 26, 2020 |

Levy Firestone Muse partner Daren H. Firestone‘s most recent opinion in Law360 explains the sequence of Manhattan District Attorney Cyrus Vance Jr. and New York Attorney General Letitia James’s investigation into tax write-offs of consulting fees paid to TTT Consulting LLC, a company partly owned by presidential adviser Ivanka Trump; and why such an investigation is not only appropriate, but also one of the more important opportunities to ensure that the rule of (tax) law is upheld as it relates to the affairs of the Trump Organization.

If there really was, as Ivanka has suggested, no aggregate tax loss to the state, that might be the end of the inquiry, since a politically sensitive tax case with no tax loss will prove unattractive to any enforcement agency, civil or criminal. That said, it’s hard to think of a reason other than a tax advantage for the Trump Organization to pay Ivanka as a consultant, when she was an officer of the company and should have, in the normal course, received the income as salary or a bonus.

A more likely explanation: Ivanka was able to offset the income, for example, using prior business losses, as her father reportedly did to erase the tax obligation on hundreds of millions of dollars.

Read the full opinion, “NY Right To Investigate Trump Consulting Fees For Tax Fraud,” on Law360 (account required) or download a PDF here.