How can a nonprofit organization acquire a federal tax exemption?

A nonprofit organization in Washington can acquire a federal tax exemption by filing Form 1023 with the IRS. This form is used to apply for recognition of exemption under the Internal Revenue Code. The information required on the form includes the name, address and purpose of the organization, financial information, fees, and the organization’s structure. The nonprofit must also provide additional materials, such as articles of incorporation and bylaws. The application should be accurate and complete, and the organization must be able to demonstrate that its purpose is to benefit the public interest. Once the Form 1023 is accepted, the IRS will issue a determination letter recognizing the organization as a tax-exempt, nonprofit organization. This letter must be kept in the organization’s records as evidence of its tax-exempt status. The organization should also review the IRS rules and regulations for nonprofit organizations and make sure it is complying with all state and federal laws. Once the nonprofit organization has received its tax exemption, it can begin to apply for certain types of funding. Many grants and donations to nonprofits are tax-exempt or at least partially tax-exempt. This is a major benefit for nonprofits as it allows them to generate additional revenue from doing their good work.

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How can a nonprofit organization acquire a federal tax exemption?

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