Are Gifts to church and nonprofit staff and volunteers taxable to the recipients?

Nonprofit and Church Legal Trends - Free Edition - November December 2008 (free edition)

Our church provides gifts to several employees and volunteers each year at Christmas and birthdays. Staff members receive either a check or a gift certificate to a local grocery or department store. Key volunteers often receive a turkey, a fruit basket, or a gift certificate to a local grocery or department store. The amount of these gifts varies depending on the recipient’s position, but the range is $20 to $250.

Taxable income does not include any "de minimis fringe benefit." Section 132(e)(1) of the tax code defines such a benefit as "any property or service the value of which is so small as to make accounting for it unreasonable or administratively impracticable." Cash can never be a de minimis fringe benefit since it is not "unreasonable or administratively impracticable" to account for its value. The same conclusion applies to "cash equivalents," such as gift coupons and certificates, even though the property acquired with a coupon or certificate would have been a nontaxable de minimis fringe benefit had it been provided by the employer.