In the 2025 tax year, cryptocurrency exchange Kraken filed 56 million forms with the U.S. Internal Revenue Service (IRS) for crypto transactions.
Approximately 18.5 million of these forms were for transactions valued at less than $1, and over half were for $10 or less. According to Kraken, only 8.5% of the newly introduced Form 1099-DAs exceeded $600, the threshold for reporting 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 cryptocurrency transactions, leading Kraken to estimate an additional burden of $250-$500 per year for dedicated tax software for active cryptocurrency holders.
The company stated that the time spent by taxpayers reconciling these micro-transactions often results in costs that are disproportionate to the revenue the IRS will collect. The Tax Foundation estimates that individual returns already cost Americans $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 identified 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. The company argues that these issues result in a significant reporting burden and is pushing for a broader inflation-indexed exemption, as well as the option for taxpayers to elect when staking rewards are taxed.