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 newly introduced Form 1099-DAs exceeded the $600 threshold, which triggers reporting for non-employee compensation, with 74% of the forms being for less than $50. Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer.
The company estimates that the additional burden on active cryptocurrency holders is between $250 and $500 per year for specialized tax software, on top of standard filing costs. Kraken argues that the time spent by taxpayers reconciling these micro-transactions, often with incomplete data, generates costs that are disproportionately high compared to the revenue the IRS will collect from them. The exchange identifies two issues with the tax code: the lack of a minimum exemption for cryptocurrency payments and the treatment of staking rewards as ordinary income at the moment of receipt.
Kraken is advocating for a broader, inflation-indexed exemption and the option for taxpayers to choose when staking rewards are taxed.