Nonprofit status is a state designation, and is a characteristic of how the legal entity has been formed. Nonprofit status may make an organization eligible for certain benefits, such as state sales, property, and income tax-exemptions. Federal tax-exempt status is granted solely by the Internal Revenue Service (IRS) after their review and approval of an extensive application (Form 1023). For organizations to be exempt from federal income tax, the 501c3, and for contributors to be able to claim income tax deductions for their contributions, the organization must obtain tax-exempt status from the IRS.