I know a certain person from a certain country who has millions of dollars in bitcoin and is not arrested over only paying taxes via his poor normal cash.
Also, sure. Can lead to prison but even then the judge can't actually remove the bitcoin.
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if he only keeps that B1tC0iN and never uses it he will never need to pay tax
but the point of money is to use it to buy things
if people manage to avoid paying Income Tax the government will move to switch taxation to Sales Tax instead in which case you will be paying tax on your B1tC0iN when you use it
the reason Income Tax is more popular than sales tax is because Income tax can exceed your total spending whereas sales tax can only be a fraction of it - and government wants to take as much of your money as possible