> If I sell junk in my house for a profit there is no IRS record nor is there a government record for selling Bitcoin for cash or a million other possible transactions.

Yes, but most people do very few of the possible transactions that don't create records, at least so as to incur income tax liability. Requiring supplemental filing only where actually necessary would vastly reduce the burden on most taxpayers, and sending a baseline bill with notice of the need and conditions for supplemental filing would be a viable alternative to the current system.