It's not specific to clergy either. My ex-wife works for a grocery store chain that provides employees with gifts cards to buy flowers or food for funerals of close relatives. It's a nice little bereavement gesture, and it is duly added to the W-2 and the appropriate employment taxes are deducted. I had to research this when my church wanted to give a going-away gift to our previous pastor. Basically, any company can only give tax-free gifts if they have de minimis value (t-shirts, mugs, etc.) or if they are part of a longevity award program that applies to all employees with similar longevity. (Plaque at 5 years, clock at 10 years, etc.)
