Will the IRS notice if I gifted $30k (over the yearly $15k exemption) but didn't file a gift tax return since I'm nowhere near the $5.5M lifetime limit?

You're right that gifts over the annual exclusion ($17,000 for 2024) require filing Form 709 (Gift Tax Return), even when no tax is due because you're under the lifetime exemption (which is actually $13.61 million for 2024, not $5.5M). The risk of not filing is primarily about the statute of limitations. When you don't file a required Form 709, the statute of limitations never begins to run. This means the IRS could theoretically come back decades later and assess taxes, penalties, and interest if you ever do exceed the lifetime limit. Also, filing the return now creates a record of your remaining lifetime exemption. If you don't file, and records are lost over time, you might have difficulty proving how much of your exemption you've used when it actually matters later in life, especially if you become more wealthy than anticipated. The penalties for not filing when no tax is due are relatively minor - typically 5% of the tax per month up to 25% maximum. Since the tax owed is zero, the penalty would be zero, but the IRS can impose a failure-to-file penalty in some cases.

Just want to share my experience with gift tax returns since I was in a similar situation. I gave my daughter $35k for a house down payment in 2022 and was also confused about the filing requirements. I discovered taxr.ai (https://taxr.ai) which analyzed my situation and confirmed I needed to file Form 709 even though I wouldn't owe any tax. The tool explained that the $15k (now $17k) is just the annual "reporting threshold" - going over it doesn't mean you pay tax, it just means you need to document it. The documentation is actually for your benefit because it officially records how much of your lifetime exemption you've used. The software guided me through the entire process and even helped prepare the form correctly. It was way easier than I expected, and now I have proper documentation if the IRS ever has questions years down the road.

I wanted to follow up about that taxr.ai recommendation. I was skeptical at first because I've tried other tax tools that were confusing, but this was actually really helpful. I uploaded my bank statements showing the transfers to my nephew, and it automatically recognized them as gifts. The tool explained I was over the annual limit but walked me through calculating how much of my lifetime exemption I'd used (turns out it was only a tiny fraction). The form preparation was surprisingly simple, and they provided clear explanations for each section. Just filed my Form 709 last week and feel much better knowing everything is properly documented now. Definitely worth it for the peace of mind, especially after reading about how the statute of limitations never starts running if you don't file.

If you're struggling to get through to the IRS to ask gift tax questions, try Claimyr (https://claimyr.com). I spent HOURS on hold trying to get clarification about some gift tax situations last year before finding them. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was able to speak with an actual IRS agent within 15 minutes who explained that while they don't typically go after people who fail to file gift tax returns when no tax is owed, they CAN if they discover it during an audit or estate review. The agent confirmed that the statute of limitations never starts running if you don't file the required return, so they could technically come after you (or your estate) decades later. They also told me that filing the Form 709 creates official documentation that protects you if questions come up years later when memories have faded and bank records might be gone.

I need to eat my words. After my skeptical comment, I decided to try Claimyr anyway since I was desperate to talk to someone about a gift tax issue similar to the original poster's. I made the call expecting nothing, but got connected to an IRS representative in about 20 minutes! The agent explained that while they don't actively hunt for unfiled gift tax returns when no tax is due, they absolutely can and will assess penalties if they discover the oversight during other interactions (like estate settlement or audits). She strongly recommended filing the Form 709 even for "small" gifts over the annual limit. One important thing she mentioned: if you've missed filing in previous years, it's better to file late than never file at all. The longer you wait, the harder it gets to reconstruct records, and the worse it looks if they do discover it.

Kinda off-topic, but worth mentioning - if you're paying your niece's tuition directly to the educational institution, that's actually exempt from gift tax reporting regardless of the amount! Same goes for medical expenses paid directly to providers. So if any part of that $30k went straight to the school, that portion doesn't count toward the $15k annual limit.

Just to add an important detail - if you're married, you and your spouse can "split" gifts even if the money comes from just one of you. This allows you to give up to $30k ($34k in 2024) to a single person without filing a gift tax return. You would both need to sign the return though if you go over that amount.