The way I understand it (and please correct me if I'm wrong, everyone) is that you want to have your BTC in smaller parcels, and not on exchanges preferably. Also, send it around to yourself, using always a new generated address, which blurs your tracks.
At some point in the future, the government may come knocking on your door, and you may find yourself faced with capital gains tax - but only from that one parcel that you used for the fiat/BTC deal.
 

 So this is useful for dodging taxes. Also interesting to know. However,let's say in my case... honestly it just would be my case if I had a bunch of money, that I would be trying to pay taxes not dodge them. 

 Well, the more taxes you want to pay, the bigger the parcel that you show the government.
And let's also think about the BTC price in 10 years or so.