Kraken, a leading crypto exchange, has filed 56 million crypto-transaction forms with the U.S. 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.
This has resulted in a substantial reporting burden, with each form requiring reconciliation tasks for taxpayers and incurring additional costs. The lack of a de minimis exemption for crypto payments and staking rewards is cited as a primary cause of this issue. Kraken estimates that the additional burden on active crypto holders could range from $250 to $500 per year, excluding standard filing costs. The exchange argues that the hours spent reconciling these micro-transactions generate costs that are disproportionate to the revenue the IRS will collect.
Furthermore, the Tax Foundation estimates that individual returns already cost Americans a combined $146 billion in time and expenses. Kraken identifies two key problems with the tax code: the lack of a de minimis exemption for crypto payments and the treatment of staking rewards as ordinary income at the moment of receipt.
The exchange is advocating for a broader inflation-indexed exemption and the option for taxpayers to elect when staking rewards are taxed, either at receipt or at sale.