It was really just a question of when.... https://www.wsj.com/articles/irs-crackdown-on-bitcoin-exchange-fuels-privacy-worries-1490623200
I think it's funny that people think a currency where every owner from it's creation is permanently and inextricably a part of that currency and visible to everyone is somehow private or secure!
I hate pay-walled sites. Alternative: http://news.morningstar.com/all/dow...n-bitcoin-exchange-fuels-privacy-worries.aspx
The OP is more of a conversation starter. You see if your broker has to report to the IRS, I don't see why Coinbase shouldn't? If bitcoin is currency, than Coinbase is an FX broker.
That's why I don't trade BTC and I hold my own wallet instead of depending on Coinbase etc to hold it for me.
That works if you never converted dollars/euros/pesos.... into bitcoin and never wish to convert bitcoin back to another currency....and as long as you never split your bitcoin or do any transaction that can be traced back to you. Keeping in mind that every transaction that's ever occurred is embedded in the blockchain. In general it's pretty trivial to trace bitcoin back to any real owner in the chain if they've ever done anything in the real world.
You're right, you can do it with an anonymous dude on a street corner, however at that point it's the anonymity of cash that's protecting you, not bitcoin. If you exchange with a business associate or friend, again it's easy to track down what address in the blockchain corresponds to you through them, at which point anyone can definitively tie every single BTC transaction you've done to you, without even needing a warrant!
That's why you need to maintain anonymity in the transaction as well. I wouldn't used BTC for face to face business, I'd use USD greenbacks.