Kraken, a cryptocurrency exchange, has filed 56 million crypto-transaction forms with the U.S. Internal Revenue Service (IRS) for the 2025 tax year. 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 notes that 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, resulting in a reconciliation task for the taxpayer.
Additionally, standard tax software does not support crypto transactions, and Kraken estimates that active crypto holders may incur an additional burden of $250-$500 per year for dedicated tax software. The company 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. The exchange 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. Kraken suggests that a broader inflation-indexed exemption, paired with anti-abuse guardrails, could alleviate these issues. The company is also advocating for taxpayers to have the option to elect when staking rewards are taxed, either at receipt or at sale.