You can declare under the table income to IRS and pay taxes, but keep in mind you won't be just paying Fed and State taxes, you will be required to pay Social Security and Medicare taxes as well. Since your employer didn't pay 6.2% SS tax and didn't deduct your share (6.2%), you might be required to pay 12.4% SS tax and ~3% (1.45 +1.45) medicare tax. I am not an expert but it happened to one of my friends. Hope that helps.