To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for the purpose of serving a scientific, literary, education, artistic or charitable purpose. In addition, none of its earnings may be returned to any private shareholder or individual. Additionally, it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
A nonprofit organization applies for tax-exempt status with the Internal Revenue Service (IRS). Please note that it can take 2-6 months for the IRS to return its decision. It is to the organization's advantage to take the time and effort required in filling out the paper IRS Form 1023, rather than the online IRS Form 1023-EZ.
For more information, see Internal Revenue Service (IRS) Application Processopens a new window.