So can the sole prop business pay the Corp (also owned by you) for a service to reduce the SE taxes on the personal return ???
Yes it can however there must be a legitimate service performed otherwise the IRS could take the position that you are committing income tax fraud by reducing SE taxes artificially by "hiding" profits in another entity.
Now the Corp ... if it provides a service are they paying an employee to do the work ??? If not how did the service get completed? If they do pay an employee wages to do the service your Sch C paid for then what did you actually gain in the end especially if you are the only employee ?
