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, while 74% were 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 an active cryptocurrency holder is between $250 and $500 per year for dedicated tax software, in addition to standard filing costs.
Kraken argues that the time spent 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 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 to complete their tax returns is approximately 13 hours, at a cost of $290 per return. Brokers' reports for 2025 provide gross proceeds without cost basis, meaning the form shows what was sold but not what it was bought for. Kraken received thousands of client inquiries about forms that only captured one side of the calculation.
The company 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. Kraken argues that a de minimis exemption and the option to elect when staking rewards are taxed would help alleviate the reporting burden.