From a Wisconsin paper:
The Internal Revenue Service has a low-profile but sweeping effort under way to use state land-transfer records for evidence of omissions in reporting gifts of real estate to family members.States that have handed over information on gift-like transactions are Connecticut, Florida, Hawaii, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, Washington and Wisconsin, according to the document. Ms. Bonaffini examined a sampling of data from these states and it showed "an extremely high failure-to-report rate," the document said.
One cause of unreported taxes may simply be lack of knowledge. People go and add children's names to property, thinking they are doing a good thing by trying to avoid probate, and have NO idea that they've just made a taxable gift. Sadly, they are about to get a letter from the IRS. It is far less expensive to hire a lawyer for advice BEFORE taking action than hiring one to clean up a mess.