[ensignavenger]

It is my understanding that tax law does not prevent a business from providing whatever compensation they want to- but certain compensation is taxable to the recipient as income. So if a business pays $10,000 per month for the founder/ceo/whatever's rent, that is still an expense to the business. But, the recipient has to pay tax on that 10,000 as if it were income. At least on whatever portion of it is not devoted to the business (If the apartment has an office in it that is used exclusively for the business, the cost of the office square footage is deductible).

So as long as the benefit is reported on the founders taxes and taxes are paid, it would not be tax fraud.