No. Assuming you are not a miner or receiving bitcoin in exchange for services, there are no taxes that you need to pay on the bitcoins until you sell or transfer them. When you sell or transfer them, you need to pay taxes on the difference between the value of the bitcoins and your tax basis in the bitcoins.

The value of the bitcoins would be what you sold them for if you sold them. If you traded them or did not get full value for them the value for tax purposes is their fair market value.

Your basis in the bitcoins is what you paid for them. If you mined them, it's probably their value at the time you acquired them assuming you treated them as income. Otherwise, it gets complicated. (In particular, you should either treat your basis as zero or consult a tax professional if you sell or otherwise dispose of bitcoins you received as a gift!)

If you held the bitcoins for more than a year, this is a long term capital gain. If you acquire and sell bitcoins on a regular basis, the rules get tricky for which sells you have to match to which buys.

I am not a lawyer. Please check with your own tax professional if you need advice you can rely on.

No, but you do need to keep track of how much they were worth when you bought them. Then, once you sell them or trade them for goods or services, you pay taxes on the profit.

So, for example, if you bought BTC at $400, then sold them at $450, you pay tax on the $50 difference, because you made a profit.

If you lost money in the transaction, there is no profit, there fore there is no tax. This is because BTC is treated as property, not currency. If the transaction is under $600 they do not care about the tax.

The whole rule set is pretty short, it sounds like they did not know how to proceed with BTC and threw something together quickly.

This all assumes that you wish to operate within existing tax law. BTC of course makes operating outside the tax system very easy, that is an ethical choice you need to make for yourself.

If you wish to get out of fiat, and never report anything after the purchase, but you still feel obligated to pay taxes, you could pay the tax on the full purchase price and then be done with it, but that again is an ethical choice. Bitcoins, when used correctly with TOR and purchased without a paper trail in cash, are for practical purposes untraceable. Whether to engage with the tax system at that point is purely an ethical matter, since you have no reasonable expectation of getting caught.

We all know there is a lot of corruption in government, and much of your tax dollars are probably wasted outright, or spent on things with which you disagree. However, our taxes fund everything from the roads we drive on to the parks we use, to the retirement check you will get, to the underfunded schools which we use to educate children.

Sort that out within your own mind. Up to you.

you don't need to pay any tax on your bitcoins, simply sell them for cash, and no one can even prove you had any bitcoins in the first place. there are a lot of people willing to buy BTC in exchange for cash.