Yes, KYC just means that the exchange you're using is gonna report to the I. R, S, you can easily break the chain of addresses you have, and they won't know, but they will be under the impression that you still hold that Bitcoin.
Discussion
How would one break the chain. Sending it to a new wallet from the exchange will leave a mark so I can't even conceive how
Play with lightning network and also some btc wallets have this thing called silent payments. There are multiple ways to break the chain. But not break how much the exchange tells the irs.