...Feds collect tax on illegal activity all the time.
You'll need to elucidate on this.
Hookers, madams, drug dealers, if they are making any real money, they will need to show some income, no? Maybe they don't put every dime they make on the books, but they will pay something so they don't raise too much suspicion when they purchase a new car or a home, etc. They just don't put HOOKER down as an occupation.
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Thinking of cracked-out and/or tweaking whores getting their throats and asses brutalized for the next hit makes me hard. --Rear Admiral