We are getting some construction work done in our business. This is costing about $20K. And the contractor is asking for the payments in cash. Is it legal to pay cash to the contractor. If so, would I be able to report these expenses in my tax returns? He said he will give me the receipt for the payments we do. I got good references of this contractor about the work. Also, I saw his work in other place. I understand that he wants to save some money by not reporting this income. But I am wondering if that would be of any problem for me reporting these are expenses in my tax returns?

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