The current lifetime gift tax exemption is actually $11.7 million. This means that you can give up to $11.7 million in gifts over the course of your lifetime without ever having to pay gift tax.  But gifts over $15K must be reported to the IRS on Form 709.

@TomD8 That's where I get confused. IE - Why does the IRS say that if I give one single person a one time gift of $26,000 today, I'm responsible for filling out and submitting Form 709 AND I'm responsible for paying gift taxes on it. But then they turn around and say well actually, the lifetime limit is $11.7 million. Why not just say, if you give a one time gift over $15,000 you need to report it to the IRS but you won't be responsible for any taxes on that gift unless you give away more than $11.7 million in your lifetime? Am I interpreting that incorrectly?

@cwtaxdummy 

How would the IRS know if you exceed your lifetime limit if they did not require reporting?  They are tracking your gifts against that lifetime limit.  

---

@cwtaxdummy wrote:

Why does the IRS say that if I give one single person a one time gift of $26,000 today, I'm responsible for filling out and submitting Form 709.....

---

The extra $11,000 in your hypothetical ($26,000 less $15,000 annual exclusion) counts against your lifetime exemption, which will appear on your Form 709.

the $26K gift would require a gift tax return but you would likely owe no tax. the excess $11K would reduce your lifetime exemption. i say likely because you probably haven't exhausted your $15.7 lifetime exemption.  beware there is no annual exclusion for certain types of gifts.   Why $15K? write to Congress to ask. they are the ones that enact the tax laws, not the IRS. 

Q.  Why does the IRS say that if I give  a one time gift of over $15,000, I'm responsible for filling out and submitting Form 709, when there is no tax?

"Gift Tax" is somewhat of a misnomer.  Even though a gift tax return may be required, very few people ever actually pay federal gift tax. The purpose of the gift tax return is usually only to document a reduction in the allowable estate tax exemption.
See https://turbotax.intuit.com/tax-tools/tax-tips/Tax-Planning-and-Checklists/The-Gift-Tax-Made-Simple/....