Kraken, a leading crypto exchange, has filed 56 million crypto-transaction forms with the U.S. Internal Revenue Service (IRS) for the 2025 tax year, with approximately 18.5 million of these forms covering transactions valued at less than $1. Over half of the forms were for transactions worth $10 or less.
Notably, 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, creating a reconciliation task for the taxpayer.
Furthermore, standard tax software does not handle crypto transactions, and Kraken estimates that the additional burden on an active crypto holder is between $250 and $500 per year for dedicated tax software, excluding standard filing costs. The exchange argues that the time spent reconciling these micro-transactions generates costs that are 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, while 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, which means that even small purchases can trigger a taxable event, and the treatment of staking rewards as ordinary income at the moment of receipt.
The exchange is advocating for a broader inflation-indexed exemption and for taxpayers to have the option to elect when staking rewards are taxed, either at receipt or at sale.