My position has always been that the IRS is still kind of figuring things out as they go. If I move crypto off an exchange into fiat I will claim that because they can clearly see it. I've only ever done that twice. Anything else, if it catches up with me I will gladly do the work to make things right, but I kind of think they have bigger game in their sights.
Agreed, they don't really know what's up at the moment and so some of their measures are somewhat draconian.
I totally agree!