I'm not talking about revealing the xPub. But if you have a tax inspection where you need to justify some income in fiat, that came from a Bitcoin sale, you can get asked to prove the sale by providing the transaction id and the bank deposit receipt.

Even if you don't reuse addresses, it's trivial to deduct what's the change address or the paying one. And that affects your privacy.

The problem here is really the fiat payment, that leaves a trace that could force you to reveal at least one transaction id. 

See https://stacker.news/items/940488/r/klk?commentId=940521 for the details.

bitcoin

How do you prevent a taxable event by moving Bitcoin?

The fees are in sats and no one can link that to you if you don't:

1. Reuse addresses; 
2. Reveal your wallet xPub to 3rd parties;
3. Don't use 3rd party explorer services. 

It will require a huge effort to deanonimize txs as long as one adheres to the basic privacy principles. 

Besides, assuming one needs to provide one's wallet xPub to prove an address ownership is absurd. If such necessity arises because of one's incompetence, one can sign with the address's private key, and that's that. 

