I've had this argument with my friends and family who hold BTC (and alts) so many times.

"But why wouldn't you just declare your BTC as legally required You'll get in trouble for nothing. You always say you will never sell, so they will not tax you."

"Yeah, until they decide they will. Then, because BTC is all I have, I won't even be able to pay the taxes, so they will effectively confiscate it and make me broke".