In the 2025 tax year, cryptocurrency exchange Kraken filed 56 million forms with the U.S. Internal Revenue Service (IRS) for crypto transactions. Approximately 18.5 million of these forms were for transactions valued at less than $1, and over half were for $10 or less.
The company noted that only 8.5% of the newly introduced Form 1099-DAs exceeded $600, the threshold for reporting 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. Furthermore, standard tax software does not support crypto transactions, with Kraken estimating an additional burden of $250-$500 per year for dedicated tax software for active crypto holders. The exchange emphasized that the time spent reconciling these micro-transactions often results in costs disproportionate to the revenue the IRS will collect.
The Tax Foundation estimates that individual returns already cost Americans $146 billion in time and expenses, while the National Taxpayers Union Foundation reports an average time of 13 hours and $290 per return for non-business filers. Kraken identified two 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 exchange argues that a de minimis exemption and the option to tax staking rewards at sale, rather than receipt, would help alleviate the reporting burden.