If you are worried, would it not be better to spend your Bitcoin directly, rather than converting it to fiat currency, This will help the expansion of Bitcoin as well as protecting your privacy.
It ain't necessary everyone does have merchants available at their places for their coins to be spent...
You need to make them fiat in order to spend them, also the price here plays an important role...
@OP,
Yes they do report them, but for bigger transactions...
So, not to worry if you don't earn more than $600 a month with it...