IRS recent public notice on guidance on Bitcoin IR-2014-36 with Q&A in Notice 2014-21 designates Bitcoin as property, not currency.
Like KYGTIGuy hints at, all Bitcoin transactions more than $600 USD value are now US Federal tax reportable and may be grandfathered. Users must keep track of the value at the date of the transaction from now on. Payment providers and 1099 contractors/vendors are required then to self-report based on these transactions. This effectively cuts down on the aspect of anonymity in the US using Bitcoin.
Virtual currency money exchangers based in the US are already required to file as an MSB through FinCEN which then requires them to have an AML program. FYI; the backbone of AML programs is the know your customer requirement (through CIP processes) from the Patriot Act and one of the major advantages from using virtual currency is anonymity. There is a lot to be ironed out for it to be considered a currency in the US.
Believe it or not, examining authorities are starting to actually play catch-up. For believers, you can at least be thankful that US banking authorities are open to the idea of its use and regulation, much unlike India who has totally outlawed it.
See questions 12, 13, and 15. The tax reporting requirements are for US citizens only for transactions > $600 and US based third party payment/settlement providers by completing 1099s, which is what a VC money exchanger will now need to do depending on volume and dollar base.
Other countries are following suit. Heck, this IRS guidance comes right after Canada's
Revenue Agency issued its own guidance in November 2013 on the tax rules and treatment of Bitcoin.
From Wikipedia, "Canada, the federal government announced that it was going to regulate Bitcoin under its anti-money laundering and counter-terrorist financing legislation, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The Quebec government agency, the Autorité des marches financiers, also announced that it would prosecute violations of the Securities Act (Loi sur les valeurs mobilières), the Derivatives Act (Loi sur les instruments dérivés) and the Money Services Businesses Act (Loi sur les enterprises de services monétaires) for Bitcoin transactions, particularly those involving Bitcoin ATMs" (http://en.m.wikipedia.org/wiki/Legality_of_Bitcoins_by_country).
Bitcoin has real time exchange values that are tracked by all money exchangers, so a transaction right now for 0.04 BTC has a USD equivalent of $22.8457. Here's an example of a BTC exchange rate chart: https://bitcoinity.org/markets
Lol, I was a lucky kid who happened to buy a bunch of drugs off the Silk Road in high school back when BTC was less than $50. I forgot about Silk Road and my BTC wallet until 2017 when it was raging and my friends were telling me to get in on it.
I already had like 2.7X BTC in my wallet when it went on the bull run in 2017. It paid for my previous GTI lol