It's standard "Capital Gains Tax" rather than "Income Tax" when you take it out, just like it would if you sold forex/pm or stocks for that matter.
All governments keep an eye on unusual inflows from accounts on that one, no i wouldn't recommend to cheat on that one.
Yeah, I'd watch out. It doesn't take much to trigger an IRS audit.
I'll be paying taxes on it, anything above and beyond what my expenses are.