You see a $1 bill on the sidewalk. Is it 'worth' it to pick it up, because of all the paperwork you need to file to the IRS?

This is basically what you're asking with the small transactions. The IRS doesn't care. You get $50 in your birthday card, you earn $20 baby sitting, $20 mowing someone's lawn, $20 shoveling driveways, etc. The IRS doesn't care.

If you win $1000 in a slot machine - the IRS cares. You pay $20,000 cash for a car. The IRS will be all over that.
 
Actually, my brother was trying to buy a new car from a car dealership years ago. After trade-in, he owed $6,000. He had $6,000 in cash. The car dealership would NOT accept cash - they wanted him to sign up for a loan (that he could pay off the next day without paying more than $6,000) - the car dealership (a Nissan) said they wouldn't take cash because they had to report it to the IRS and didn't want to go through the headaches.

My brother then, on principle, found a car dealership that would pay cash (a Toyota dealership) and bought from them. So, it's not only hard to spend btc, it's hard to spend US dollars.