The compliance costs of DAO tax reporting, such as IRS Form 8949, can be substantial. DAOs must track and report capital gains/losses from token transactions, requiring detailed records of acquisition dates, cost basis, and sale proceeds. Form 8949 demands transaction-level reporting, often involving thousands of trades, which increases complexity. Costs include specialized tax software (e.g., Koinly, $49-$300 annually), professional accounting services ($500-$5,000+), and significant time—estimated at 7.9 billion hours annually for U.S. tax compliance, equating to $546 billion in economic impact. DAOs face additional challenges due to decentralized structures, unclear IRS guidance, and potential penalties for errors. Accurate categorization of short/long-term gains and wash sale adjustments is critical to avoid audits. Streamlined reporting tools and expert consultation are essential to manage these costs effectively.