Kraken, a cryptocurrency 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 covering transactions valued at less than $1 and over half for $10 or less. According to the company, only 8.5% of the newly introduced Form 1099-DAs exceeded the $600 threshold, while 74% were for less than $50. Each form is also sent to the customer, resulting in a reconciliation task for the taxpayer.
Kraken estimates that the additional burden on active crypto holders is between $250 and $500 per year for dedicated tax software, excluding standard filing costs. The company argues that the time spent reconciling micro-transactions often results in costs that are disproportionately high compared to the revenue the IRS will collect.
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 identifies two issues 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 company suggests that a broader inflation-indexed exemption, paired with anti-abuse guardrails, could help alleviate the reporting burden. Furthermore, Kraken proposes that taxpayers be allowed to choose when staking rewards are taxed, either at receipt or at sale, and notes that its systems and those of other exchanges already support both reporting methods.