"they didn't take physical money from the business, give it to the son as a payment, and then take it back and put it back into the account to receive rent from him."

It's the same thing, though. If I give you money, and make you give it back as Rent; or, I tell you that we determined that same amount is not yours, because it is covering the rent..is equivalent. All we did is skip the banking.

"The son lives in the house which is paid for by the business."

And anything that should be paid using personal funds, would be treated as paid "on behalf of" him, even though the "business" paid. As you pointed out, they are commingling funds, as it is. That was not as big a deal for SP, but now they are not tracking business that isn't fully theirs and treating that son as an indentured servant.

"They also pay for the food that the whole family eats. You had said before that money taken for personal expenses are draws, which makes sense, but now you're saying I'm not allowed to do that unless actual cash passes hands? That doesn't make sense."

I stated it is treated the same as a draw. If the son doesn't take $100, but Mom pays his car insurance using $100 from the business account, it's the same as if you gave him the $100 (draw) and then he paid the insurance himself. Except, that is the way it's supposed to work.

"Are you saying that if a business owner writes a business check (or swipes a business card) for a personal expense and calls it an "owner's draw," he's breaking the law"

Nope. Never stated that. But this is commingling.

"and that he must instead write the check to himself, cash it, and use the cash to buy the thing?"

It's the same thing. You are confusing Direct and Indirect; they are both "on behalf of" personal.

"I grant up front I'm not as smart as you at these things, but I'm pretty sure you're wrong on this one."

And I never even stated what you now accuse me of.