"At the peak of the market a stallholder can have a transaction taking place every 15 to 20 seconds and you just don't have the time to do all those electronically, (through eftpos) you just can't get through them that quickly."
Mr Bradley said IRD had visited the market in recent years and would likely do so again.
"Stallholders should be in no doubt that the department intends to check out cash businesses, including markets," he said.
"As Whangarei Growers Market is now well known for its popularity, it is highly likely that IRD representatives, probably armed with a video camera, will pay the market a visit at some stage."
An IRD spokesman said the department monitored a wide range of activities in the course of compliance work, including liaising with market organisers throughout the country to identify stallholders who were self-employed, hobbyists, or those linked to an established business to assess the risks of non-compliance.
"Site checks may also be carried out. Hidden economy principally arises from activity which takes advantage of opportunities offered by cash transactions and involves the under-reporting or non-reporting of taxable income," the spokesman said.
"Generally, this is sourced from cash income or cash surrogates (for example, through barter activities) by businesses or individual customers. Our focus is also to increase the understanding of compliance issues for these specific groups, improve voluntary compliance, and provide assistance and education to stallholders on PAYE and GST filing and the use of online services and filing options."