Is it possible to launder cash this way: Purchase bitcoins at an atm using cash. This is completely anonymous right? Then sell them on an exchange and report the gains there to the IRS as if they were mined bitcoins. Possible?
Most Bitcoin ATM vendors require you to identify yourself and track your buys and sells. This is done due to Know Your Customers and Anti Money Laundering regulation. You need to present the source of of your money in some point when you exceed some threshold of volume. If any Bitcoin ATM vendor chooses not do this it would be helping committing money laundering crimes.
If you find a ATM vendor stupid enough not to do any kind of KYC do not expect them to stay in the business in long run. Alternative, if the operator of ATM stays anynonymous, they are looking for a scam exit and will run with your money.
You could spend it on miners, actually mine some bitcoins and then sell the mined bitcoins for fiat again. And then the IRS will tax the mined bitcoins because they consider it 'profit'. Using bitcoins to launder money doesn't really make that much sense. Besides, everything is kept 'eternally', or at least until the year 2100 something, because what goes on the blockchain, stays on the blockchain. They can use your transactions to prosecute up until the crime 'expires'.