US-based cryptocurrency exchange Kraken has filed approximately 56 million crypto transaction forms with the Internal Revenue Service (IRS) for the 2025 tax year. Notably, around 18.5 million of these forms pertained to transactions valued at less than $1, with over half being for $10 or less. According to Kraken, a mere 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold, which triggers reporting for non-employee compensation, while 74% were for less than $50. Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer.
Furthermore, standard tax software does not support cryptocurrency transactions, leading Kraken to estimate an additional burden of $250-$500 per year for active crypto holders. The exchange emphasizes that the time spent reconciling these micro-transactions often generates costs that are disproportionately high compared 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 identifies two key issues with the tax code: the lack of a de minimis exemption for crypto payments and the treatment of staking rewards as ordinary income at the moment of receipt.
The exchange advocates for a broader, inflation-indexed exemption and the option for taxpayers to choose when staking rewards are taxed.