I received an email the other day that talked about a church that wanted to bless their pastor with a gift. The church wanted to give their pastor a $10,000 gift, but the church wanted to fix the gift so that the pastor would get gift, tax free. The church did not want the pastor to have to pay any taxes to the IRS or to his state government, on the money.
If an employer gives a "bonus" or "love gift" to an employee, it is simply additional salary. When a donor gives money to the church, receives a receipt for a deductible contribution to the church, and the church pays the bonus or gift to the employee, it is taxable compensation to employee.
Employers are permitted to exclude from gross income (as a de minims fringe benefit) the value of a gift that is given by an employer if the value is insignificant (i.e., turkey, ham, etc.) (Revenue Ruling 59-58). This does not apply to gift certificates or similar items that can readily be converted to cash, regardless of the amount involved. The church can give some length of service awards that we will discuss later, that can be tax free, but it is for a very limited amount.
Church members are free to make personal gifts to ministers and it may or may not be tax free income. If the gift is organized by church leaders, it becomes taxable income.