as far as I know, brokerage firms do not report option trades to IRS. Would this be a major loophole ? Anyone ?
No, it would not and is not a tax loophole. A loophole is an anomaly or fluke (intended or unintended) in the law that legally allows the taxpayer a favorable consequence. The fact that most brokerages do not report stock option sales in no way legally relieves the taxpayer of reporting the sales and the resulting gains or losses. If a taxpayer failed to report significant option sales and any large taxable gains thereon, that would likely be considered fraud or tax evasion and would result in referral to the IRS's criminal investigation (division). The prisons are full of people who thought they could get away with it.