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 personally also never declare my earnings from Bitcoin. I behave like this because I know the government in my country does not like Bitcoin and if I can get revenue from Bitcoin definitely use of Bitcoin will be increasingly prohibited. And of course, I do not want if Bitcoin is getting banned because I am looking for daily income from Bitcoin.