If A pays B cash, and writes it off as a tax deduction, and B doesn't declare the income, is B an audit risk?

To be clear: If Person A pays Person B for a professional service (such as a massage or auto repair) with cash, and Person A writes it off as a tax deduction, and Person B doesn't declare the cash as income on his/her tax return, could the IRS then audit Person A and use the receipt Person A received to audit Person B?





In other words, if Person B wants to avoid getting caught for tax evasion, should s/he be sure to declare the cash s/he receives for professional services, whenever s/he is providing a receipt (thereby creating a paper trail), or would the IRS never, in practice, use a receipt they receive while auditing a consumer to audit a business?





Please don't post an answer unless you can cite a source or have expertise/experience in this area. And please don't lecture me on the morality/ethics of this dilemma. I'm asking for a friend, who is aware of the moral/ethical issues, but simply wants to know the reality of the situation.|||The answer is yes this can land person B in front of an IRS auditor.|||We'll ignore the fact that the massage isn't deductible.





A can't deduct the expense without a 1099-Misc. The IRS will look for the 1099-Misc on B's return. If B refuses to give A his SSN, A is required to withhodl 30% and send it in for taxes.|||It's true that if A reports the expense, then B can be caught. Rule of thumb...if you get a 1099, then report the income. Otherwise I don't think you can get caught.