...no actual proof of legal income (like a job that involved withheld taxes) for several years, then Hell yes they ought to be able to seize it...
So only a job as an employee counts as "legal income" in your eyes?
What about someone who can't hold down a job and makes a living through odd jobs?
Before you say "drug dealers don't pay taxes", many do by inflating their declared "odd job" or "consulting" (much more common) income.