It is difficult to respond definitively based solely on the facts that you have provided.
That said, I suspect that "the problem" - if there is one, and leaving aside the accountant's understandable suspicions about cash transactions - may be that you are inappropriately avoiding legal obligations that you have based on your earlier lawsuit..
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You do not have to open a bank account. However, without one, you will always have a difficult time convincing anyone else, whether that is the IRS or the California Franchise Tax Board, or a licensed tax return preparer, that you are properly reporting your income and your deductions.Ask a similar question
You don't have to create formal entities, complex structures to own rental real estate. There are no rules in that regard. The starting point must be "what are you trying to accomplish?"
But here's the practical note - if you don't keep bank accounts, you may still want to keep organized your receipts, money orders, etc. to prove your expenses, if ever called upon to do so. And I'd recommend that you do file your tax returns, on time, and accurately.
Just words from a former IRS guy.
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I agree with the other attorneys. There is nothing wrong with dealing in cash, but unfortunately in today's economic climate, the IRS and FTB are always suspect of those dealing strictly in cash. Regardless of whether you organize well with receipts and track your expenditures with journals, having a bank account would help immensely should you be the subject of an audit. Moreover, if you have legitimate legal debts owed, your accountant is likely concerned that you are purposely avoiding a legal obligation, which he'd likely want no part of. Lastly, there are several areas that would require more detail before a definitive answer can be given. This answer is simply based on the high level facts you presented.
Best of luck,
Adam C. AparicioAsk a similar question