Kraken, a cryptocurrency exchange, has filed 56 million crypto transaction forms with the US Internal Revenue Service for the 2025 tax year. Approximately 18.5 million of these forms were for transactions valued at less than $1, and over half were for $10 or less.
The company notes that only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold, which triggers reporting for 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 crypto transactions, resulting in an estimated additional burden of $250-$500 per year for active crypto holders. Kraken argues that the time spent reconciling these micro-transactions generates costs that are disproportionate to the revenue the IRS will collect.
The Tax Foundation estimates that individual returns already cost Americans $146 billion in time and expenses, while 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 and the treatment of staking rewards as ordinary income at the moment of receipt are two issues that contribute to the reporting burden.
Kraken is advocating for a broader, inflation-indexed exemption and the option to tax staking rewards at sale, rather than at receipt.