Do we pay our contractor in cash ?

[Shilpa Shah]

We are renovating our first investment property. Our contractor has provided us with an option to get 10% discount if we pay all cash. 
When asked for the receipt, he said it would be an acknowledgement of the cash but not the usual formal receipts. 

Has anyone tried this before ? My husband is opposed to it, shd we go for it ? 

[JD Martin]

I wouldn't do it. At least if you pay by check with written record and get a receipt, no one can claim later you were trying to do anything under the table. Let's say the guy gets caught avoiding his taxes and tells them that the bulk of the cash came from you. Do you want the IRS investigating you or auditing your bank accounts and records?