Kraken, a leading crypto exchange, has filed 56 million crypto transaction forms with the US Internal Revenue Service for the 2025 tax year. Notably, around 18.5 million of these forms were for transactions valued at less than $1, and over half were for $10 or less. Only 8.5% of the new Form 1099-DAs exceeded the $600 threshold, which triggers reporting for non-employee compensation, with 74% being 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, with Kraken estimating an additional annual burden of $250-$500 for active crypto holders. The company argues that the time spent reconciling these micro-transactions generates costs 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 key 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 advocates for a broader, inflation-indexed exemption and the option for taxpayers to choose when staking rewards are taxed.