It is common practice this time of year for employers to give their employees gifts. Where a gift is infrequently offered and has a fair market value so low that it is impractical and unreasonable to account for it, the gift’s value would be treated as a de minimis fringe benefit. As such, it would be tax-free to the employee, and its cost would be tax deductible by the employer.De Minimis Benefits - In general, a de minimis benefit is one that, considering its value and the frequency with which it is provided, is so minor as to make accounting for it unreasonable or impractical. De minimis benefits are excluded from income under Internal Revenue Code section 132(a)(4) and include items not specifically excluded under other sections of the Code. Examples of de minimis benefits include such items as:Controlled, occasional employee use of a company photocopier.Occasional snacks, coffee, doughnuts, etc., furnished to employees.Occasional tickets for entertainment events given to employees.Holiday gifts from the employer to the employees.Occasional meal money or transportation expenses paid for by the employer for employees working overtime.Group-term life insurance on the life of an employee’s spouse or dependent with a face value not more than $2,000.Flowers, fruit, books, etc., provided to employees under special circumstances, such as a birthday or illness.Personal use of a cell phone provided by an employer primarily for business purposes.In determining whether a benefit is de minimis, you should always consider its frequency and value. An essential element of a de minimis benefit is that it is occasional or unusual in frequency. It also must not be a form of disguised compensation.Whether an item or service is de minimis depends on all the facts and circumstances. In addition, if a benefit is too large to be considered de minimis, the entire value of the benefit is taxable to the employee, not just the excess over a designated de minimis amount. The IRS has ruled previously that items with a value exceeding $100 cannot be considered de minimis, even under unusual circumstances.