U.S.-based cryptocurrency exchange Kraken has reported filing 56 million forms for crypto transactions with the Internal Revenue Service (IRS) 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 newly introduced Form 1099-DA, which is used for reporting cryptocurrency transactions, has created a substantial burden for taxpayers, with only 8.5% of the forms exceeding the $600 threshold that triggers reporting for non-employee compensation.
Furthermore, 74% of the forms were for less than $50. Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer, and standard tax software often does not handle cryptocurrency transactions.
Kraken estimates that the additional burden on an active cryptocurrency holder is between $250 and $500 per year for dedicated tax software, on top of standard filing costs. The company argues that the time spent reconciling these micro-transactions, often with incomplete data, generates costs that are wildly disproportionate to any revenue the IRS will collect from them.
The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses, while the National Taxpayers Union Foundation puts the average time for non-business filers at about 13 hours and $290 per return. Kraken identifies two problems with the tax code: the lack of a de minimis exemption 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, paired with anti-abuse guardrails, and is also pushing for taxpayers to be allowed to elect when staking rewards are taxed, either at receipt or at sale.