New IRS guidance on virtual currency (VC) released 3/25/14http://www.irs.gov/uac/Newsroom/IRS-Virtual-Currency-Guidance
For most purposes, IRS requires a property approach (Schedule D gain/loss) not a foreign currency approach.
VC is taxable when mined by miners. VC transactions are reportable. See the IRS document for details and FAQ. If you have been doing it differently, consult a tax professional.
Regarding the scope of IRS rules, they only apply to US taxes. Although the IRS might wish to be the top tax authority in the US they are not. They are beneath the constitution, the revenue code (written by lawyers in congress and constantly changing), court case law, and the treasury department. However in the absence of guidance from these other authorities, IRS rules should be followed.
Here is my circular 230 disclaimer. This post is intended to provide generalized tax and valuation information that is only appropriate in certain situations. It is believed accurate at this time, but these rules, alas, are constantly changing. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding tax penalties that may be imposed on any taxpayer. These contents should not be acted upon without specific professional guidance. Our liability, under any circumstances, is limited to the amount paid for our services. Please contact us if you have questions.