AviraDeArah,
“They’re aware that people are paid in cash for such services, and they don’t realistically expect people to report it.”
I believe they do expect people to report it as self-employed income if (minus expenses) you net more than $400 cash in the year.
“rebbeim often work as 1099 employees “
Basically regarded as independent contractors?
“file for parsonage exemptions”
That one’s outside my wheelhouse.