Kraken, a cryptocurrency exchange, has filed 56 million crypto-transaction forms with the 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.
The company notes that only 8.5% of the new Form 1099-DAs exceeded the $600 threshold, and 74% were for less than $50. Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer. Kraken estimates that active crypto holders face an additional burden of $250-$500 per year for dedicated tax software, on top of standard filing costs.
The exchange argues that the hours spent reconciling micro-transactions generate 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 that the average time for non-business filers is around 13 hours and $290 per return.
Kraken identifies 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 is pushing for a broader inflation-indexed exemption and the option for taxpayers to elect when staking rewards are taxed.