Although it has been talked about for several years, there still is no federal legislation that requires financial institutions to cash government checks for noncustomers. Your policy could therefore provide that you will not cash government checks for noncustomers (meaning they will have to go elsewhere), or it could state that you will cash them only if certain forms of identification are provided (and you would want to make the types of ID as foolproof as possible, although I recognize that almost anything can be counterfeited), or your policy could state that the ID must be furnished AND you will charge a fee.
Whatever you decide, realize that this is an activity fraught with risk. If the person who cashes the check turns out to not be who they say they are, the treasury department can come back against your bank, since the endorsement will have been forged, and you will have little recourse.
When you cash a government check for a noncustomer