I used Tornado Cash (non-US citizen here) for hiding transactions from the public (not hiding from the government), and when I filed my taxes, I still accounted for everything that is stored there + transacted via Tornado Cash, just like I do for my bank account. Appendix contained instructions for how they could access the proof of my transactions and accounts to verify themselves.
I think you misunderstand. Transactions happening on most blockchains are public, meaning if I send a transaction on the network, if others know my address, they know it was my transaction.
Tornado Cash allows you to sever the tie between addresses on the Ethereum blockchain, so I don't have to have my transactions public, all while still being able to legally declare my taxes as if I didn't use Tornado Cash at all.