Exactly. Money may be make believe, but the bars you'll be behind if you evade taxes are real.

Yeah, teh USD wins ... because "OR ELSE"

end of story, right?

I think the parent's point stands: the dollar (or any currency for that matter) is artificial. The government merely "declares" it has value, hence making it "make-believe". In the hypothetical scenario where it ends up suffering from hyperinflation, it would lose all its make-believe value, just the way the Zimbabwean dollar died.

And if the perceived value of Bitcoin fluctuated wildly due to market speculation, would it lose its make-believe value too?

All currencies, digital or not, big or small, continuously lose and gain "make-believe" value in largely unpredictible ways (see forex markets). Some are stable (EUR). Some are volatile (BTC). Some die (German Papiermark, Zimbabwean dollar). Some live longer (GBP, JPY). Some lost value in the immediate past (USD). Some gained value in the immediate past (BTC).

Can people pay there taxes in bitcoins ? ( it's a question).

Of course not. I couldn't use USD to pay my taxes either, because I'm Canadian. I could earn money in any currency I choose, including BTC, and exchange them for any other currency I choose, including USD or CAD.

Why does the currency any given person pays their taxes in matter?

Not sure if this is true in Canada, but in the US at least, employers are required to pay you in USD (at least up to the minimum wage). And, if someone offers to pay you in CND for your work in Canada, you can't refuse them, even if you'd rather be paid in BTC.

Sure, you can exchange USD, CND and BTC as much as you wish, but the point is that, within Canada, you can be certain that you can always pay and be paid in CND -- which can't be said for any other currency.

My business can accept any currency I want it to. It's true that if I had employees I would have to pay them in local currency. I'm not sure how any of this is relevant to BTC's "relevance" as a currency--it doesn't need the support of a nation-state for it to be a valuable medium of exchange.

indirectly you could, if the IRS partnered with BitPay you could pay in BTC and BitPay would send the IRS USD to their bank account. You would still pay in BTC but they get paid in USD.