Unless Congress exempts income, it’s taxable. Cash income is just as taxable as checks or credit cards. As I reported last December, one enterprising Minnesota strip club owner didn’t think that was the case. He was wrong.
As Joe Kristan noted, Larry Kladek stocked the ATM in his club with his cash receipts. All went well until the IRS found out. He pleaded guilty last year to tax evasion; he was just sentenced to 20 months at ClubFed.