IRS treats Bitcoin as property. Accordingly, the recipients need to report every bitcoin transaction on Schedule D and calculate its cost basis ( appreciation or depreciation of Bitcoin). I am not talking about the reporting of the cumulative income, but the additional requirement of reporting of each Bitcoin payment or disposal. Say you received 0.0001 BTC held it for 5 days and then converted to USD. These are two taxable events, not one, with the requirement of calculating BTC appreciation between these two events. Now multiply this burden by every transaction.

In my opinion, IRS successfully killed BTC use in the US by treating it as property rather than currency (for currency FX, transactions under $200 are exempt from cost basis reporting on schedule D)