How to Get Tax Exemption
- To get a tax exemption, you need to apply to the IRS by filing paperwork. This proves your organization qualifies for tax-exempt status.
- The IRS provides an Employer Identification Number (EIN) when you apply. This number identifies your organization for tax purposes.
- Your state agency provides the tax exemption certificate with your exempt number. This allows you to buy items without paying sales tax.
Applying for Tax Exemption
To apply for tax exemption with the IRS, file Form 1023. You must explain why your organization qualifies. It can take up to a year to get approval.
Tax-Exempt Status Maintenance
- Some common tax-exempt organizations are churches, schools, museums, and other nonprofits. They file under section 501(c) of the tax code.
- To keep your status, you must file annual returns with the IRS. This proves you still operate as a tax-exempt organization.