A much worse nightmare for tax collectors is an anonymous currency (such as cash). With Bitcoin the tax collector (and everyone else) can review the blockchain and verify that every account payed the taxes it owes. If they find an account that has not payed taxes, they can look at who payed into that account, and who that account payed, and use investigative techniques (IE ask amazon for the address that kindle was shipped to) to discover the indentity of the account holder.

The biggest mistake the Government can make (as a tax collector) is killing Bitcoin, as that will only increase the likelihood that a more anonymous currency will take its place.