Although you still have to be careful, as one trader found out [1]. His was a little more than a "small side business," though.
[1] https://www.coindesk.com/localbitcoins-trader-pleads-guilty-...
"Our enemy has realized that they are fighting guys from the future. Now, ahem, it is as brilliant as it is infuriating. If you live like it's the past, and you behave like it's the past then guys from the future find it very hard to see you. If you throw away your cell phone, shut down your e-mail pass all your instructions face-to-face, hand-to-hand turn your back on technology and just disappear into the crowd"
Except we've been fighting tax evasion for as long as there have been taxes.
But yes: please walk into a forest and "life as if you don't exist". I suppose that includes not posting conspiracy fanfic online, right?
By oppressive technology I am referring to the kind of tech that obviously oppressive governments would have built decades ago if it had been possible, and that the US will gradually arrive at soon enough without explicitly seeking to do so.
Let's think this through. How well has government prohibition of what private citizens do in their own homes worked in practice for anything else it's been tried on? Then consider that we're talking about data rather than physical objects, which are even slipperier.
All such an action would do is drive it underground. Anyone who wants to use bitcoin still will.
Sure, you can tax evade all you want at a small scale, but once you hit remotely interesting figures they are going to wreck you.
As soon as you buy a sports car, or a yacht and pay in cash (which is probably at least as difficult as doing it in Bitcoin) the IRS will take notice. You're going to have to explain why you suddenly drive an expensive car without any trace of payments for it, or you're going to lose it.
Unless your money really come from illicit sources, in which case you have no choice, I doubt it is worth it.
Of course, one of the goals of cryptocurrencies is to not have to go through central organizations at all. Not converting your cryptocurrencies back to fiat, and not storing them on an exchange will be the best way to dodge taxes. Pretty sure that if you hide your keys well enough, the IRS and co cannot prove that you have any assets in cryptocurrencies as long as how you acquired them can't be traced.