Kraken, a cryptocurrency exchange, has filed 56 million forms with the US Internal Revenue Service for the 2025 tax year, with approximately 18.5 million of these forms covering transactions valued at less than $1 and over half valued at $10 or less. Only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold, which triggers reporting for non-employee compensation, while 74% were valued at 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, with Kraken estimating the additional burden on active crypto holders at $250-$500 per year for dedicated tax software, excluding standard filing costs.
The company argues that the time spent by taxpayers reconciling micro-transactions often results in 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.
The National Taxpayers Union Foundation reports that the average time for non-business filers is around 13 hours and $290 per return. Kraken identifies 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 for taxpayers to choose when staking rewards are taxed, either at receipt or at sale.