Taxing seems justified. For any governmental structure to function, this is required. It would be great if the tax funds went towards educating regulators about blockchain/cryptos. However, categorizing cryptos as property may not be the best decision. Currency definitions or more commodity like features underlying cryptos seems as though the IRS is profiting as much as possible while the regulatory framework gets sorted out. This could invariably deter innovation. Record access by the government happens all the time, e.g., NSA, so the IRS seeking those records does not seem like much of a stretch. If it deters fraudulent use, then it does not seem too egregious of a move considering everything else the Federal Gov't does.