Madeline Operates a Janitorial Service

question 46

Essay

Madeline operates a janitorial service. The business is organized as a corporation. She has a crew of 100 employees that clean offices and commercial buildings on a set schedule. Madeline also runs a maid service. Since persons paying for the maid services are individuals, the amounts paid to Madeline are not reported to the IRS. Madeline has developed a tax plan. She will deposit the maid service fees to her personal bank account. As a result, she can draw a smaller salary from the janitorial service. She will pay the maids for their services through the corporation. Since she is not deducting her salary from the corporation to the extent she keeps the maid fees, she does not report income from the maid fees. Has Madeline evaded the income tax? Explain.

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Definitions:

Bradycardia

A slower than normal heart rate, typically defined as fewer than 60 beats per minute in adults.

Tachycardia

A condition characterized by an abnormally fast heart rate, often defined as exceeding 100 beats per minute in adults.

Heart Rate

The number of heartbeats per unit of time, typically expressed in beats per minute (bpm), indicating cardiovascular fitness and health.

Telemetry Unit

A hospital section dedicated to the monitoring of patients' vital signs and cardiac status remotely using specialized technology.