Cash

• A common misconception is that cash payments are untaxed. While there is often no record of a cash payment, you are still required to pay tax on it. Just because it is easier to get away with not declaring it does not mean that not declaring it is legal.
  
  

Illegal Sources

• If you're a drug dealer who deals in cash, you still need to pay tax on it. This is done by filing as miscellaneous self-employed income.
  
  

Standard Income

• Of course, there is standard income that you earn from working in a job. This income is taxed.
  
  

Untaxed Income

• There are untaxed sources of income. Combat pay, for example, is untaxed, as is worker's compensation. There are other examples, and if you receive money from an uncommon source, you should investigate whether it is taxed or not.