I hate having to rain on this parade, but SK is not a 501(c)(3) tax exempt organization. Donations that you make to the game are therefore not tax deductible with the IRS. I actually looked into obtaining this status or the closest equivalent some years ago and attempting to qualify is a huge pain in the rear.

But please donate! Just don't attempt to claim it on your tax return.

IRC § 183 Overview
A number of taxpayers who have significant income from other sources reduce their taxable income by reporting losses from activities that may or may not be engaged in for profit. It is up to IRS examiners to make a factual determination whether an activity is engaged in for profit.

On September 27, 2007, the Treasury Inspector General for Tax Administration (TIGTA) issued a report entitled “Significant Challenges Exist in Determining Whether Taxpayers With Schedule C Losses are Engaged in Tax Abuse.” The review looked at high income Small Business/Self-Employed (SB/SE) taxpayers (total income sources of $100,000 or greater) who claimed business losses using a U.S. Individual Income Tax Return (Form 1040) Profit or Loss From Business (Schedule C) for activities considered to be not-for-profit. The results of the audit found the following:

“In general, if a taxpayer has hobby income and expenses, the expense deduction should be limited to the hobby income amount. About 1.5 million taxpayers, many with significant income from other sources, filed form 1040 Schedules C showing no profits, only losses, over consecutive Tax Years 2002 – 2005 (4 years); 73 percent of these taxpayers were assisted by tax practitioners. By claming these losses to reduce their taxable incomes, about 1.2 million of the 1.5 million taxpayers potentially avoided paying $2.8 billion in taxes in Tax Year 2005. Changes are needed to prevent taxpayers from continually deducting losses in potentially not-for-profit activities to reduce their tax liabilities.”