Can I Get in Trouble by the IRS for Having My Tenants Give Me Rent in Cash, or a Check Made Out to Cash?

Note: The DearEsq free 'ask a lawyer' site is offered as a free informational service to the public and is not intended as legal advice. Laws vary from state-to-state, and in addition every situation is unique, and relevant facts may not be known. The answer to the question posed below may not apply to in your state or to your situation. For legal advice in your state and your situation you should consult with an attorney in your state who is familiar with the rules and laws in your state.

“I have an angry tenant who is threatening to turn me into the IRS because I have a cash, or check made out to cash. policy for collecting rent. This apartment is in the basement of my home and tenants have to walk thru my mud room / laundry to get to the apartment door. The rent is $550 a month. Would the IRS take such menial case on as this?”

It’s hard to say what the IRS will and won’t take on, but tax evasion is a criminal offense and underreporting income can be seen as a form of tax evasion. You want to be sure you’re reporting your rental income properly. Your best bet is to sit down with a qualified accountant and discuss your situation, and what you need to do to get your reporting in order.