One beta user built a script that sells bitcoin in real-time as he swipes his card and tops up his fiat account, effectively making his card "spend bitcoin" :)

As far as the US IRS is concerned, every time he makes a purchase with bitcoin, it is a taxable event where he must declare any gains/loss from the time he purchased the bitcoin. This type of regulation is hindering BTC adoption in the US. BTC also doesn't solve any problems the average person has in a developed country, but that is another story..

that's so cool. have they open sourced this yet?

There is also this BTC debit card available, which could probably be used in conjunction with your service. https://www.shiftpayments.com/card