Here in my country which is now an upcoming tiger economy (though we are still classified as a third-world country), we are free to participate in Bitcoin both buying and selling as the government is treating Bitcoin just like any other foreiign money.
However, I am sure that only a very, very small fraction of us are declaring our Bitcoin income. It seems to me that the government is not that interested to get strict with individuals as long as they can tax the Bitcoin exchange provider for the service rendered.
I am then wondering the situation with other countries. Can your government really be able to track if you never declared gains made from Bitcoin transactions?
I think we live in the same country where in our governments doesn't really paying attention regarding cryptocurrency since they are merely focusing on how to stop Drugs in our country. Its a good thing for cryptos like us then but we can't really predict when its going to last. Maybe when bitcoin become more popular here the government might want to dig too far and want to regulate income tax in bitcoin. I hope it wont be too soon because honestly speaking I don't want to declare my bitcoin income yet.