Operating as a business, iirc, incurs legal record-keeping requirements. The gray area comes from the nature of the business: they convert from one currency (official legal tender) into another (a currency with a different standard of value).
Nope. Bitcoin is not a currency (at least according to the IRS), it is an asset. You are not exchanging currency, you are buying or selling an asset.
Bitcoin barely has legal precedent for or against it, and the services or goods bought with Bitcoin (if from a legit business) are already taxed.
Buying and selling assets has plenty of existing law and legal precedent. Yes, if you "buy" something with Bitcoin (actually a barter transaction) you owe tax on it but that has nothing to do with the IRS, there is no national sales tax or VAT in the US.
In a case like this, I believe the IRS is over-reaching its authority and asking to tax people who have likely already had the BTC taxed by spending it on things.
If you buy BTC then sell it for a higher price you are subject to capital gains tax on the difference. It doesn't matter what happens to the proceeds of the sale -- it is the transaction that is taxed. If you sell stock and buy a car with the proceeds are you exempt from capital gains tax on the sale because you paid sales tax on the car? Of course not. Even if you trade the stock directly for the car, you still have to pay the capital gains tax on any appreciation and the sales tax on the fair market value of the car. These are 2 different taxes levied by 2 different entities.