Kraken, a cryptocurrency exchange, has filed 56 million crypto-transaction forms with the US Internal Revenue Service for the 2025 tax year. Approximately 18.5 million of these forms pertained to transactions valued at less than $1, while over half were for $10 or less. According to the company, only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold that triggers reporting for non-employee compensation, with 74% being for less than $50.
Each form is also sent to the customer, creating a reconciliation task for the taxpayer. The company notes that standard tax software does not handle cryptocurrency transactions, resulting in an estimated additional burden of $250-$500 per year for active cryptocurrency holders. Kraken argues that the time spent reconciling these micro-transactions generates costs that are disproportionately high compared to the revenue the IRS will collect from them. 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 about 13 hours and $290 per return. Kraken identifies two primary 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 company advocates for a broader, inflation-indexed exemption and the option for taxpayers to choose when staking rewards are taxed, either at receipt or at sale.