They didn’t have a problem with someone paying in cash insofar as the actual handling thereof was done by a subcontracted private entity for that purpose.
I pointed out they could either take payment or issue me a letter saying they refused payment.
BTW: proving my point of not trusting an intermediary private company commissioned by the gov’t agency to take payment on their behalf - last year I paid my income tax via credit card using the authorized private intermediary ... who, it turns out, failed to transfer the funds, causing me fines. Methinks I’ll pay in cash at the nearest IRS office this year.