> The taxable event occurs because the IRS sees crypto as property rather than a currency.
The IRS doesn't make the tax law. How cryptocurrency transactions get taxed is a matter for legislatures and the courts.
Obviously, not everyone has the resources to fight the IRS, and your life will go much easier if your interpretation of the tax code matches that of the IRS. But the way you explain it here puts the cart before the horse.
IRS guidance aren't laws but they detail how the IRS is going to treat tax collection based on current law. At some point in the future Congress may classify crypto currencies as actual currencies such as the Yen, Euro, etc. at which point the tax laws about currency exchange would apply instead of capital gains on property.
The IRS doesn't make the tax law, true, but they are behaving consistently with the relevant laws; putting "currency" in the name of something doesn't define it as a currency.
Legislative action could of course change this, but until then you are probably tilting at windmills.
IANAL but tax is also levied on fiat currencies where similar profit/loss occurs. In that sense, the IRS is treating crypto like it treats other currencies.
Congress addressed this in 1986, the IRS is just administering duly enacted tax law:
The IRS doesn't make the tax law. How cryptocurrency transactions get taxed is a matter for legislatures and the courts.
Obviously, not everyone has the resources to fight the IRS, and your life will go much easier if your interpretation of the tax code matches that of the IRS. But the way you explain it here puts the cart before the horse.