Bitcoin is new, so in my opinion people should file as they were boy scouts to get maximum goodwill from authorities.
I'd only worry about state and local authorities for those in the US doing business in a regulated domain. Personal users should keep their bitcoin info and earnings as far from government ears as possible.
Ye, couldn't agree more. Not a chance in hell I'd tell the state about my personal btc and the 'profit' from increase in value. That just should not come into anyone's equation.
And a good point from someone - difference between 'cheating tax' and 'avoiding tax'.
BTC (the value you change to fiat) for tax purposes should only be stated if you run a business, or if you're claiming benefits.
Hey .. 40% inheritance tax in the UK (yes, its sick) - how about starting a business
"Want your inheritance to go to your spouses/relatives 100%? Then do it through Bitcoin!"