I found this question on Yahoo! Answers and thought I came up with a pretty good response - see below.
Q: IRS forcing sale of Bond's homerun ball? - what would prevent the kid from donating it to hall of fame and claiming it as a tax write off, then collecting money from the IRS as charitable contribution.A: That's a very good question, I think having to pay tax on an baseball like that with no intrinsic value is BS, who's to say what the baseball may or not be worth so to get taxed on memorabilia like that is garbage
So if it's worth 1,000,000 and he sells the ball he probably gets 700,000 after taxes (depending on the tax rate which I have no clue about), if he donates it and wrights it off he'd probably save 300,000 in taxes so he's still better off selling it
I think what he should do is find some hot shot lawyer who's looking to make a name for himself and take the IRS to court over the issues, he could probably find someone to do it for free just for the publicity, if he drags it out in court for a while the hype could increase the value of the baseball substantially - it could be the most famous baseball ever, so then win, loose or draw against the IRS, he might be able to sell it for 2,000,000 and keep 1,400,000! How does that sound?