Funny you should ask. A reporter asked me about this yesterday. This is what I sent her:

There is an old slang term “tank town,” or just “a tank,” which referred to one-horse towns or whistlestops, the kinds of places that don’t have much to remark upon except the town water tank or water tower. These are the kinds of places that boxers would fight on tours. These were not necessarily sanctioned bouts but perhaps a bit more orchestrated, where you might have the same boxers fighting eaach other week after week, in town after town, with the same predictable results, much like professional wresting is done today.

Related to “tank,” boxing has had several meanings of “to dive.” It can meaning being knocked to the canvas, or intentionally throwing a bout–letting yourself lose. The same for “flop”–besides meaning a knock-down, it could, as early as 1907, also mean to fake being knocked out or to throw a fight. (By 1919 “flop” was used by Variety to describe failures in Hollywood–it is highly likely that use comes from boxing.)

From those earlier “tanks,” it is highly likely that we get both “go into the tank” and “take a dive,” which show up in boxing in the 1930s. By the mid- to late 1930s, to do a “tank job” also meant “to take a dive”–that is, to throw a match. Even further, by the mid 1950s uses of “go into the water”–meaning “to tank”–show up.

As time has passed, “to go into the tank” or “to tank” has come to almost always mean to fail unintentionally, while “to take a dive” has come to almost always mean to fail intentionally.

Now, where does “to be in the tank for someone” come in? Judging from the evidence I have seen, it’s a simple outgrowth of the older forms. “To be in the tank” for someone means that you’re working on their behalf, usually with connotations of secrecy, backroom deals, and sly manipulation. Those are the same kind of devious acts which would characterize a boxer throwing a match on behalf of someone else.