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 related to transactions valued at less than $1, while over half were for transactions worth $10 or less. The company noted that only 8.5% of the new Form 1099-DAs exceeded $600, the threshold for reporting non-employee compensation, and 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 cryptocurrency transactions, resulting in an estimated additional burden of $250-$500 per year for active cryptocurrency holders. Kraken emphasized that the time spent reconciling micro-transactions often generates costs 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. The National Taxpayers Union Foundation reports that the average time for non-business filers is approximately 13 hours and $290 per return. Kraken identified two problems 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 a de minimis exemption and the option to elect when staking rewards are taxed would help alleviate the reporting burden.