For salary or wage payments, kind of. If you received your normal wages in XMR then the government would have a hard time proving anything illegal is happening, even if both your employer and you are breaking the law.
You mean the government may have to rely on old fashioned police work, like undercover agents or informants witnessing the illegimate activity rather than passively spying on financial transactions? Say it ain't so!
If your employer wants to help you committing tax fraud, they would have to cook the books, which is a lot of work and entails a considerable amount of risk. Whether they pay you with a cryptocurrency or real money doesn't make any difference, as far as I can see.
No, they can just not withhold your tax obligation. Mandatory withholding is not even the norm -- KS and MO don't require it, it seems only Eastern seaboard states and maybe CA do.
People keep walking this back to massive fraud but more likely what anonymity will do is just allow businesses to escape onerous operating issues. E.g. having employees in some states is worse than having them in others because of those state's perceived requirements to operate an LLC in that state, and other related rules. It's not even clear if some of these requirements are enforceable federally.
Not withholding the tax is not enough. Both the employee and the employer have to lie to the government for this to work, and for an employer this means they need to falsify their financial records, because the tax agency can demand to see them. Also, anonymous transactions already exist, so cryptocurrency doesn't make this type of fraud easier or more likely.
Your employer doesn't need to lie, you need to not get audited. Even if both you and your employer lie they will have cash flow discrepancies.
As I mentioned, there are more defensible reasons for only having one party lie, like avoiding CA's (future?) claim that paying someone who lives in California implies you hired them in California and need to incorporate in California.
