From p. 396 of Andrew Sinclair, Prohibition: The Era of Excess:
Yet the strangest situation of all had been rendered legal by a decision of the Supreme Court. The Court had ruled that the Bureau of Internal Revenue had the right to request income-tax returns from bootleggers. The Court saw no reason “why the fact that a business is unlawful should exempt it from paying the tax that if lawful it would have to pay.” In the argument of the case, it was even suggested that bribes paid to government officials might be held deductible as business expenses. To this day , the bootleggers of the last dry state in the Union, Mississippi, pay federal income tax and a state tax on their illegal profits.