Kraken, a cryptocurrency exchange, has filed 56 million crypto-transaction forms with the US Internal Revenue Service (IRS) for the 2025 tax year. Approximately 18.5 million of these forms were for transactions valued at less than $1, while over half were for $10 or less.
The company noted that only 8.5% of the newly introduced 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, resulting in a reconciliation task for the taxpayer. Furthermore, standard tax software does not support crypto transactions, and Kraken estimated the additional burden on active crypto holders to be $250-$500 per year for dedicated tax software, on top of standard filing costs.
The company argued that the time spent reconciling these micro-transactions generates costs that are disproportionate to the revenue the IRS will collect from them. The Tax Foundation estimated 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 de minimis exemption for crypto 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.