We propose a bargaining model of tax evasion with a seller that offers a price discount to a buyer in exchange for a cash payment without a receipt, which allows tax evasion. We study the effect on evasion and government revenue of two policy instruments: a tax on cash withdrawals (TCW), that imposes a cost on the buyers who pay cash, and a tax rebate conditional on the receipt. The tax rebate reduces evasion but it is costly if tax evasion is low. The TCW reduces evasion only if it is set at a sufficiently high rate, that must be higher the larger is the mass of cash users. We also show that the implementation of the TCW, which poses several challenges, is easier if the cost of cash hoarding is high.