Are Christmas cash bonuses or gift certificates supposed to be taxed??

I have been asked by our CFO to consider paying payroll taxes on the value of Christmas gift certificates which are given to over 200 employees as a gift for the holidays.

I had always been under the impression that there is a minimal level of value for gifts that is not taxable (perhaps $25.00). One legal opinion is that any cash gift or gift certificate equivalent to cash does not fall under what is known as the de minimis rule (providing the value of a meal, use of office equipment, paying small amounts for transportation expense, etc.). Does anyone have the official word on this?

Your help is most appreciated in the spirit of the holidays.

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