You don't know what you're talking about. The wallet is just an address encoded as hash and its key has been generated on a machine that has never been connected to the web.

It'd be easier for G men to confiscate my physical property and assets than get to my BTC. I can trade BTC simply by sending/receiving from my wallet (which is not tied to my name or address) to another. You can absolutely use crypto anonymously and that's exactly why many criminals prefer it even to cash. Do you think cash is not traceable? Is the IRS a joke to you?