In the 2025 tax year, cryptocurrency exchange Kraken filed approximately 56 million crypto-transaction forms with the U.S. Internal Revenue Service (IRS). Of these, around 18.5 million pertained to transactions valued at less than $1, with over half being for $10 or less.
Notably, 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.
Additionally, 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 exchange emphasized that the time spent by taxpayers on 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 an average time of 13 hours and $290 per return for non-business filers. Kraken identified two key 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 exchange argues that these issues lead to an undue reporting burden and proposes legislative solutions, including a broader inflation-indexed exemption and the option for taxpayers to elect when staking rewards are taxed.