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 pertained to transactions valued at less than $1, with over half being for $10 or less. The newly introduced Form 1099-DA, which is used for reporting non-employee compensation, had a threshold of $600 for reporting; however, only 8.5% of the forms exceeded this amount, while 74% were for less than $50.
Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer, who must also contend with the fact that standard tax software does not handle crypto transactions. Kraken estimates that the additional burden on an active crypto holder could range from $250 to $500 per year for dedicated tax software, over and above standard filing costs. The exchange notes that the hours spent by taxpayers reconciling micro-transactions, often with incomplete data, generate costs that are disproportionately high compared to the revenue the IRS will collect from them.
The Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses, while the National Taxpayers Union Foundation puts the average time for non-business filers at around 13 hours and $290 per return. The lack of a de minimis exemption for crypto payments means that even small purchases can trigger a taxable event, and staking rewards are treated as ordinary income at the moment of receipt, based on the token's market price that day. Kraken is advocating for a broader inflation-indexed exemption, paired with anti-abuse guardrails, as well as the option for taxpayers to elect when staking rewards are taxed, either at receipt or at sale.