In the movie Brewster's Millions, Brewster (Richard Pryor) had to spend $30 million in 30 days, have no assets at the end of that 30 days to inherit the actual prize of $300 million. So, every expense had to be accounted for, and there could be no self-dealing. He couldn't hide an asset or spend it on something that was not of reasonable market value; otherwise, he would forfeit the inheritance. A paralegal kept track of his receipts for the law firm.
Expenditures listed for tax write off purposes have to operate the same way. It's not enough to say, "Oh, I can imagine paying an employee on the side as a consultant." Sure, we can imagine anything, but would that have qualified as a good spend in Brewster's Millions? No. You actually have to spend the money at a reasonable market rate for a specific service, and there have to be clear and distinct records of that. The question then is this: could Ivanka through her LLC have provided consulting services that would have equaled the write off amount at fair market value for billable hours at the same time that she was drawing salary at fair market value for billable hours? Brewster couldn't just hire a juggler and pay him $30 million. The point is that any fair audit would reveal the whole consulting pay-off as a sham; it's not fair market value for consulting--indeed, on a number of projects, nobody involved remembers any "consultants" at all. What billable hour rate would yield that $732,000, or whatever? Are there invoices? What were her salaried duties, and how many hours did those account for? By the way, none of these are tough questions - anybody running any business of any consequence can account for the billable hours or specific dollar amounts of expenses with documentary evidence.
Could he have paid the money as a bonus t Ivanka, then declared that an expense. Sure, I guess. But that would also fall under the Brewster's Millions rule, in that the bonus has to have been for some service. An outsized bonus to the principle's daughter would, of course, raise a flag that a consulting fee to an unknown LLC would not - remember that the consulting fee-Ivanka payment was only really discovered by the Times because the amounts were the same; the tax filing doesn't actually name Ivanka as the recipient, which is rather the point. Why not just pay a bonus? Because then the person keeping track at IRS might say, "Hey, is this a proper bonus or a gift or fraudulent expense?" Of course, that's precisely what it was, but it's harder to see when it's "Consulting to TTT LLC" rather than "Bonus Payment to My Daughter."
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