The IRS knows if you give a gift if you report the gift as required on form 709.
Some people don't report the gift to the IRS and never have issues but if you're gifting something large in amount then the IRS may find out through some other means.
The primary way the IRS becomes aware of gifts is when you report them on form 709.
You are required to report gifts to an individual over $15,000 on this form.
This is how the IRS will generally become aware of a gift.
However, form 709 is not the only way the IRS will know about a gift.
The IRS can impose penalties for not filing a gift tax return, even when no tax was due.
Gifts above the annual gift tax exclusion amount made during the year generally must be reported on Form 709.
The gifts might not be taxed, because of the lifetime gift tax exclusion.
If you give more than $15,000.00 in cash or assets (for example, stocks, land, a new car) in a year to any one person, you need to file a gift tax return.
That doesn't mean you have to pay a gift tax.
It just means you need to file IRS Form 709 to disclose the gift.