It all starts with a discussion.
Artist Y is approached by the director of arts organisation X and asked to provide an artwork for an upcoming charity fundraiser.
Artist Y is hesitant because they've been approached by five different groups in the last month for work. Because the director of arts group X mentions tax deductions in passing, the artist agrees to donate a little picture.

The artist receives a letter from the organisation a few months after the fundraiser, thanking him for the contributed piece and listing the sale price. With this ostensibly official letter in hand, the artist might easily assume that the selling amount can be deducted from their taxes.