2. The IRS also allows deductions for a home office. The rules about this are pretty strict, but again, there are gray areas here about what counts as an office.
And by "tons of gray areas" you actually mean "a laser-sharp line between what is allowed and what is not."
A founder using the company to pay for their own housing is subject to income tax on the value of the housing provided. Full stop. There are no defensible situations that will survive a tax audit in which the founder gets away with using the startup to pay for their housing without getting taxed on it.
And the IRS no longer allows a deduction for home offices for employees, and won't allow this deduction again until 2025. The home office deduction is strictly for those running a separate business out of their home, and may only be used to offset income reported on the return from that separate business.
1. First, it's perfectly legal for an employer to pay for housing, but it may be counted as income to an employee. It depends: https://www.corporatehousing.com/blog/corporate-housing-tax-...
2. The IRS also allows deductions for a home office. The rules about this are pretty strict, but again, there are gray areas here about what counts as an office.