system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How is my boss at the pizza place I work at able to pay all of his employees cash without anyone (IRS) looking into it? This is incredibly illegal no?
gpt
There's nothing inherently illegal about getting paid in cash, as long as everyone reports their taxes as they should then it is all ok.

What can happen with some businesses that pay in cash is that some employees are "off the books". In this situation the employee is paid out of the day/week's takings before the employer actually tallies up how much the business made. This means that, on paper, the business is making less money than it actually is which can save the owner in taxes (the specifics will vary depending on tax laws in your region, but this usually amounts to tax fraud).

The tax offices do police this sort of practice through audits. Of course they can't audit everyone all the time, so a lot of smaller businesses can go on operating this way more or less indefinitely. Even if they are audited, because the cash-based employees aren't on any documentation it can be hard to detect what's happening.

In theory employees could tip off the tax office, but in general this doesn't occur, keeping their income off the books is beneficial for the employee because they can avoid paying income tax of it, effectively boosting their wage.