Kraken, a cryptocurrency exchange, has filed 56 million 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. The newly introduced Form 1099-DA, which is used to report cryptocurrency transactions, has created a huge reporting burden for taxpayers.
Only 8.5% of the forms exceeded the $600 threshold, and 74% were for less than $50. Each form is sent to the customer, resulting in a reconciliation task for the taxpayer, and standard tax software does not support cryptocurrency transactions. Kraken estimates that the additional burden on active cryptocurrency holders is between $250 and $500 per year, excluding standard filing costs.
The company argues that the time spent reconciling these micro-transactions generates costs that are disproportionate 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 puts the average time for non-business filers at about 13 hours and $290 per return. The lack of a de minimis exemption for cryptocurrency payments and the treatment of staking rewards as ordinary income at the moment of receipt are two problems that contribute to the reporting burden. Kraken 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.