Inappropriate legal terms have been thrown about casually in reference to Bitcoin, and these may be prejudicial to Bitcoin's survival. They need to be addressed and eliminated positively, and directly. Bitcoin can be structured so that it is not a currency, is not taxable, and is not reportable. This means no 1099s or other forms, IF we do this correctly.
For United States citizens, it is highly likely that bitcoin matches the IRS's barter rules, if nothing else:
http://www.irs.gov/taxtopics/tc420.html