Kraken, a cryptocurrency exchange, has filed 56 million forms with the US Internal Revenue Service (IRS) for the 2025 tax year, with approximately 18.5 million of these forms covering transactions valued at less than $1 and over half for $10 or less. According to the company, 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, resulting in a reconciliation task for the taxpayer.
The company estimates that the additional burden on an active cryptocurrency holder is between $250 and $500 per year for specialized tax software, in addition to standard filing costs. Kraken argues that the time spent reconciling these micro-transactions, often with incomplete data, generates costs that are disproportionate to the revenue the IRS will collect. The Tax Foundation estimates that individual tax returns already cost Americans a combined $146 billion in time and expenses, while the National Taxpayers Union Foundation reports that the average time for non-business filers is approximately 13 hours and $290 per return.
The exchange identifies 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. Kraken 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.