Isn't that a part of the attraction of bitcoin? You can AVOID tax?
Nope. It doesn't have that property.
And as for "realized gains", why not just sell your bitcoins offline to some person willing to show up at a coffee shop and pay cash?
Because you still owe taxes on that transaction.
Paperwork is painful enough. Why add to the misery?
Because getting prosecuted for tax evasion is far far more miserable.