Kraken, a cryptocurrency exchange, has filed 56 million forms with the IRS for the 2025 tax year, with approximately 18.5 million of these covering transactions valued at less than $1 and over half at $10 or less. Notably, only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold, and 74% were for less than $50.
Each form also requires the customer to reconcile their transactions, resulting in additional tasks for taxpayers. The lack of standard tax software support for crypto transactions further exacerbates the issue, with Kraken estimating an additional annual burden of $250-$500 for active crypto holders.
The exchange cites the Tax Foundation's estimate that individual returns already cost Americans $146 billion in time and expenses, with the National Taxpayers Union Foundation reporting an average time of 13 hours and $290 per return for non-business filers. Kraken identifies two key problems in the tax code: the absence of a de minimis exemption for crypto payments and the treatment of staking rewards as ordinary income at the moment of receipt. The exchange advocates for a broader inflation-indexed exemption and the option for taxpayers to elect when staking rewards are taxed, either at receipt or at sale.