Ever heard of Civil Obedience? The idea is that one complies with a questionable law to the letter, in order to force a change in the law. In this case the market can develop the appropriate software to generate the appropriate IRS forms and then let IRS deal with the paperwork burden of tracking millions of small capital gains and losses.

As far as I can see this is a perfect case for Civil Obedience. 

PS: One should also include Bitcoin network transaction fees in order to accurately determine the tax cost basis to the last satoshi.