How does a nonprofit organization obtain federal tax exemption?

In the state of Washington, a nonprofit organization can obtain federal tax exemption by filing a Form 1023 with the Internal Revenue Service (IRS). The form is an application for recognition of exemption from federal income tax under section 501(c)(3) of the Internal Revenue Code (IRC). This allows the organization to be exempt from paying federal income tax as well as receive certain other tax-related benefits. The organization must meet certain criteria to receive federal tax exemption. It must be organized for a religious, charitable, scientific, literary, educational, or a prevention of cruelty to children purpose. It must have no private benefit to its members and it must not be a political organization. It must also be registered with the state of Washington as a nonprofit organization. Next, the organization must provide the necessary documentation to support their request for exemption. This includes a detailed description of the organization’s purpose, a list of its activities, its financial statements, and other information requested by the IRS. Once the form and all its supporting documents have been filed, the IRS will review the application. If approved, the organization will be granted 501(c)(3) status and be exempt from federal income tax. This will allow the organization to use its resources to further its mission and help its cause.

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