Kraken, a cryptocurrency exchange, has filed 56 million forms with the US 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 new Form 1099-DAs exceeded the $600 threshold, which triggers reporting for non-employee compensation, while 74% were for less than $50. Each form is also sent to the customer, creating a reconciliation task for the taxpayer. Standard tax software does not support cryptocurrency transactions, resulting in an estimated additional burden of $250-$500 per year for active cryptocurrency holders. Kraken argues that the time spent reconciling these micro-transactions generates costs that are disproportionately high compared 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 National Taxpayers Union Foundation reports that the average time for non-business filers is around 13 hours and $290 per return. Brokers reporting for 2025 provide gross proceeds without cost basis, resulting in forms that capture only one side of the calculation. Kraken identifies two issues with the tax code: the lack of a de minimis exemption for cryptocurrency payments and the treatment of staking rewards as ordinary income at the moment of receipt.
The exchange advocates for a broader inflation-indexed exemption and the option for taxpayers to elect when staking rewards are taxed.