The biggest problem I see is that there is no centralized body tracking the prices of bitcoin and other coins. So who's to say whether a bitcoin or goatcoin or dumbasscoin was worth 215 satoshis or 250 satoshis or 200 satoshis at the time it was exchanged/spent/mined? And even the exchanges mostly track the prices in terms of btc value, not USD - so are people going to calculate how much xyz-coin was worth in terms of BTC at the time they mined it, then calculate how much BTC was worth in terms of USD at that same time?

One person could say well I mined 5000 abc-coins and exchanged them at a rate of 200 satoshis each on mintpal, and then check the price of BTC/USD on BTC-e.

A second person could mine the same 5000 abc-coins but exchange them on cryptsy and get 215 satoshis each, then check the price of BTC/USD on Coinbase and arrive at a completely different result.

And who is keeping track of the history of all these values? What proof do you have if the IRS audits you down the road, and joe-blow-exchange which you had used to swap many of your coins, is closed/out of business and cannot produce records?

This could get very tricky. I think it would make a lot more sense if they just said look, when you convert any coin to USD then you owe taxes on the gain based on how much fiat you got right then and there. As far as coins spent at merchants, I can't even think of a feasible way to deal with that... it's one thing if you make a large purchase, but what if you made many small purchases? Mountains of paperwork...