Paying in cash absolutely helps commit tax fraud. It doesn't mean your contractor will commit fraud, but if they wanted to, it's a lot easier if you pay with cash compare to check or credit card.
That's 100% on them. I'm under no obligation to give some credit card company my personal information just so more fingers are in the pie when accusing the contractor of fraud.
Cash is good and I accept 0% of the blame of what other people do in response to me paying them with cash instead of something else.
It is very plainly morally and ethically unambiguous to pay in cash.