File and report EVERY SINGLE bitcoin transaction...Obviously that can never function.
Check out the concept of ZGL wallets and coins here:
https://bitcointalk.org/index.php?topic=531135.0This guidance was a positive as it gives clarity to larger players interested in entering the bitcoin space.
...There is unfortunately no way around this, unless IRS changes the ruling.
No way around what? Did you read the thread? ZGL wallets (once available) would be an effortless way to ensure compliance with US tax laws should you choose to report to the IRS. What are you suggesting is the problem with the concept? The guidance that bitcoin is property seems actually helpful.
it's just an automated way of reporting your gain/loss and best effort algorithm to match cost basis = sale price. that's been used for decades in the financial market as a way to simplify tax reportings.
Again we are talking about bitcoin as a currency, it doesnt change the fact every single transaction - buy coffer, buy milk, buy toilet paper will need to be reported to irs. Then you look from the business side what they have to report.
It's just not feasible nor practical. For a currency to work, 1 unit of value needs to always equal 1 unit of value, you cannot apply gain/loss to it - fungibility is destroyed by irs hence the function as a currency is destroyed.