Tax fraud is usually much more painful to suffer from instead of a simple drug charge or illegal gambling charge. If you get nicked on drug charges there will be parallel reconstruction to get you on tax fraud despite this "not happening" between US government branches.

I think you have it backwards. If you commit tax fraud, you will be prosecuted. And the FBI will work with the IRS to do this.

But, supposedly, putting a non-zero value in the "illegal income" field of the 1040 (which ISN'T fraud) both (1) can't be used as evidence against you in court, and (2) isn't reported by default to the IRS to the FBI or other law enforcement agencies, so you don't end up on any watch lists.

Of course you gotta take their word for part (2), but it is their incentive to get every tax dollar regardless of source.

No sorry, I agree with you. I mean if you don't declare your income THEN you get busted on the illegal activity, you are guaranteed to get busted twice.

Ah I misunderstood, sorry.

They got Al Capone on tax fraud.