Kraken, a cryptocurrency exchange, has filed 56 million forms for cryptocurrency transactions with the US Internal Revenue Service for the 2025 tax year. Approximately 18.5 million of these forms were for transactions valued at less than $1, and over half were for $10 or less.
The company noted that only 8.5% of the new Form 1099-DAs exceeded the $600 threshold, which triggers reporting for non-employee compensation, and 74% were for less than $50. Each form is also sent to the customer, creating a reconciliation task for the taxpayer. Standard tax software does not handle cryptocurrency transactions, resulting in an estimated additional burden of $250-$500 per year for active cryptocurrency holders. Kraken argued that the time spent reconciling these micro-transactions generates costs that are disproportionate to the revenue the IRS will collect.
The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses. Kraken identified two issues with the tax code: the lack of a minimum threshold for cryptocurrency payments and the treatment of staking rewards as ordinary income at the moment of receipt.
The company is advocating for a broader inflation-indexed exemption and the option to tax staking rewards at sale rather than receipt.