“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.