You chose to pay a non-refundable deposit per their policy, knowing that you would lose the $80 if you chose to cancel, which you did. (And even if you didn't know, that's your fault as a customer for not consulting their policies more carefully.) You also cite a customer service issue, but fail to expand upon what actually happened that would warrant this kind of reaction.

It sounds more like you're annoyed that you're not getting that money back and that you're trying to find an excuse to justify retaliating against this photographer by framing it as a "they might not pay taxes on it" issue. I think you would be in the wrong if you chose to report it because you'd be attacking a small business for abiding by their own policy (during a global pandemic, no less).

For the record: Photographers like this are typically self-employed, which means they get paid through cash, personal checks, PayPal, Venmo payments, and many other channels. These are all reported on their taxes when they file as self-employed, at least in the U.S. Meaning they 100% pay taxes on this money. (Source: Older brother is a self-employed musician and he just filed his taxes... Paid like $3k.)