There have been high profile fraud cases where an employee of a business will pay personal bills with their employers accounts.

For W2 base salary income, or hourly income that's consistently 40 hours/week, you are correct.For self employed persons, specifically, tax return income is typically what prevails. 

Many employers in Austin are going full speed ahead when it comes to hiring full-time employees.New survey data from staffing firm Robert Half shows 51 percent of companies in Austin plan to add new full-time jobs in the second half of 2021, compared with 61 percent in the Dallas area and 50 percent in Houston.https://austin.culturemap.com/...

If you have defined standards, one of them should stand out with better/longer Landlord references, stronger credit, longer time of employment and better income, etc.When you play the game of collecting applications, screening, and then trying to choose the best one, you open yourself up to complaints of discrimination.

So, any PROFITS realized from the flip/deal is active, ordinary income subject to really all the taxes including self-employment tax (i.e. both sides of "FICA" including medicare). 

@Autumn Rankin Just curious why you wouldn't want to employ a mortgage broker? 

I have a masters in engineering and I wouldnt do it again and my employer paid for it.

I determine that risk during the application process using a score sheet that assesses employment, credit, and rental history.

During Term of Employment.

Same with a low score of Employment or Rental History can be made up with good credit, no criminal history, and rent to income ratio.Also in my area, minor traffic violations are considered civil penalties and not misdemeanors for items like speeding and running a stop sign and would not be considered.