Step 3: Report everyone is in full compliance.

That's how you get kicked out and gulag'd. What you do is you report the best and hardest-trying comrades as traitors and spies.

If 10% of the total population doesn't cuck, how are they going to lock up 1mil people?

The only way out of this is to deal with the commie issue directly

Jail unlikely, more likely the gov will just fine you into poverty