That's tax fraud. Call the IRS and turn in whoever is doing this; you will get a portion of the misreported funds as a bounty.

It used to be that stuff like company cars didn't count as income. That was back when we had income tax rates of 70% and 90%. It was trivial to avoid those taxes for a dozen reasons, once being that compensation that wasn't cash was not taxed.

Now, any kind of compensation [1] is taxed as income.

[1] except health care, for no good economic reason.