Is “Nonprofit” the Same as “Tax-Exempt”?
Absolutely not.
Being formed as a nonprofit corporation does not automatically mean that the corporation is tax-exempt for federal and, in some instances, state income tax. A “tax-exempt” corporation is a distinctive entity that has gained an exemption from income tax liability. A nonprofit is not eligible for exemption from income tax liability until it applies for and has been approved by the IRS for tax-exempt status.
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