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. Over half of the forms were for transactions worth $10 or less.
The newly introduced Form 1099-DA, which accounts for 8.5% of the total forms, exceeded the $600 threshold, while 74% of the forms were for less than $50. Each form is sent to the customer, resulting in a reconciliation task for the taxpayer. Standard tax software does not support cryptocurrency transactions, and Kraken estimates that active cryptocurrency holders may incur an additional annual cost of $250-$500 for dedicated tax software. The company argues that the time spent reconciling micro-transactions generates costs that are disproportionate to the revenue the IRS will collect.
The Tax Foundation estimates that individual returns already cost Americans $146 billion in time and expenses, while the National Taxpayers Union Foundation reports that non-business filers spend approximately 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 proposes a broader, inflation-indexed exemption paired with anti-abuse guardrails and suggests allowing taxpayers to elect when staking rewards are taxed, either at receipt or at sale.