Payers of income have strict reporting requirements with the IRS. This is the purpose of forms like the W-2, 1099-NEC, and other "1099" forms. Gifts that exceed the annual gift tax exclusion amount must be reported to the IRS by the donor.
And there can be criminal penalties for evading taxes:
https://www.irs.gov/pub/irs-utl/tax_crimes_handbook.pdf
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
