According to a recent announcement, Kraken, a cryptocurrency exchange, filed approximately 56 million crypto-transaction forms with the U.S. Internal Revenue Service (IRS) for the 2025 tax year. Notably, roughly 18.5 million of these forms pertained to transactions valued at less than $1, with over half of them being for $10 or less.
The newly introduced Form 1099-DA, which is used for reporting non-employee compensation, had a threshold of $600, but only 8.5% of the forms exceeded this amount, 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, and Kraken estimates that active crypto holders may incur an additional burden of $250-$500 per year for dedicated tax software, on top of standard filing costs. The company argues that the time spent by taxpayers reconciling these micro-transactions 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, and the National Taxpayers Union Foundation reports that the average time spent on non-business filers is around 13 hours and $290 per return. The lack of a de minimis exemption for crypto payments means that even small purchases can trigger a taxable event, and staking rewards are treated as ordinary income at the moment of receipt. Kraken is advocating for a broader inflation-indexed exemption and the option to tax staking rewards at sale instead of receipt.