Kraken, a cryptocurrency 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.
According to Kraken, only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold, which triggers reporting for non-employee compensation, while 74% of the forms were for less than $50. The company emphasizes that each form is sent to the customer, creating a reconciliation task for the taxpayer, and that standard tax software is not equipped to handle cryptocurrency transactions. As a result, Kraken estimates that active cryptocurrency holders face an additional burden of $250-$500 per year for dedicated tax software, on top of standard filing costs.
The company 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 from them. The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses, while the National Taxpayers Union Foundation puts the average time for non-business filers at about 13 hours and $290 per return. Kraken identifies two key issues with the tax code: the lack of a de minimis exemption for cryptocurrency 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 company is advocating for a broader inflation-indexed exemption, paired with anti-abuse guardrails, and for taxpayers to be allowed to elect when staking rewards are taxed, either at receipt or at sale.