Regarding conducting business via an LLC, C-Corp or similar to lower one's personal income, in order to stay eligible for government programs, (and more importantly to avoid the reporting requirements for someone receiving services from multiple agencies).
(Obviously claiming business expenses to be personal is illegal, I am referring to using the biz as a "savings account")
Is this legal?
Is this ethical?
Without discussing details of any persons, was there anything learned from last yrs law enforcement welfare crackdown regarding this?
For many it's worth the double taxation to be eligible for 30k in programs.
LLC will only work if you elect to be taxed as a c corp
medicare and other programs are targeting c corps
To answer the legal and ethical questions allow me to quote Judge Learned Hand
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. public duty to pay more than the law demands."
and in Commissioner v. Newman
Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.