Kraken, a cryptocurrency exchange, has filed 56 million crypto-transaction forms with the U.S. Internal Revenue Service (IRS) for the 2025 tax year. Approximately 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, 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, creating a reconciliation task for the taxpayer. Furthermore, standard tax software does not support cryptocurrency transactions, resulting in an estimated additional burden of $250-$500 per year for active cryptocurrency holders.
Kraken emphasized that the time spent by taxpayers reconciling these micro-transactions often generates 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 approximately 13 hours and $290 per return. Kraken identified two issues 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 exchange 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.