In the 2025 tax year, crypto exchange Kraken submitted 56 million forms for crypto transactions to the U.S. Internal Revenue Service (IRS).
Approximately 18.5 million of these forms were for transactions valued at less than $1, with over half being for $10 or less. Notably, only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold that triggers reporting for non-employee compensation, while 74% were for less than $50. Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer.
Furthermore, standard tax software does not support crypto transactions, leading Kraken to estimate an additional burden of $250-$500 per year for dedicated tax software for active crypto holders. The company emphasizes that the time spent reconciling micro-transactions often results in 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, while the National Taxpayers Union Foundation reports that the average time for non-business filers is around 13 hours and $290 per return. Kraken identifies two key issues with the tax code: the lack of a de minimis exemption for crypto payments, which can trigger a taxable event even for small purchases, and the treatment of staking rewards as ordinary income at the moment of receipt. The exchange argues that this can result in 'phantom income' and is pushing for a broader inflation-indexed exemption, as well as the option for taxpayers to choose when staking rewards are taxed.