Is anyone spending Bitcoin anymore, now that it is considered a taxable event by the IRS?

The whole point is the IRS can't see the transaction, as long as you are careful. Of course, sending BTC to a registered business is probably a good way to expose transactions.

Oh, really? You want to affirm the notion that Bitcoin is for fraudsters only.

One can still buy BTC and spend them more or less immediately, as a wash sale. The broker takes the risk of the price shifting under them, as is always the case with brokers.

And the US is not the world's only tax regime.

And it is not settled law that they actually are a capital asset rather than a currency; this is how the IRS intends to interpret it in the absence of legislation or a court ruling, but they've been forced to change their interpretations before.

(1) There are still some anyones outside of the US. (2) the IRS' definition of bitcoin as property is like the rules that some US states have about online purchases & taxes. You are supposed to keep track of all your online sales and pay the tax yourself. They are seldom enforced.

I don't think the IRS's decision has any immediate impact on sales using bitcoins.

Speculators are still alive and well. I'm still hoping some new software will come out to record prices automatically, making this issue irrelevant.

Spending money is a taxable event? How come?

Bitcoin is classified as an "asset", not currency by the IRS.