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 and over half for $10 or less. According to the company, only 8.5% of the newly introduced 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.
Furthermore, standard tax software does not support crypto transactions, resulting in an estimated additional burden of $250-$500 per year for active crypto holders. Kraken emphasizes 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. 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 company advocates for a broader inflation-indexed exemption and the option for taxpayers to elect when staking rewards are taxed.