Kraken, a leading cryptocurrency exchange, has filed 56 million forms related to crypto transactions with the US Internal Revenue Service for the 2025 tax year. Approximately 18.5 million of these forms pertained to transactions valued at less than $1, with over half involving amounts of $10 or less.
The company noted that a mere 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold, which triggers reporting requirements 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, beyond standard filing costs.
The company emphasized that the time spent by taxpayers 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, 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 primary issues with the tax code: the lack of a de minimis exemption for crypto payments and the taxation of staking rewards as ordinary income upon receipt. The company argues that these issues lead to unnecessary complexity and burden for taxpayers, and is advocating for legislative changes, including a broader inflation-indexed exemption and the option to tax staking rewards at sale rather than receipt.