Given the task definition and input, reply with output. This task is about reading the given passage and construct a question about the information present in the passage. Construct a question in such a way that (i) it is unambiguous, (ii) it is answerable from the passage, (iii) its answer is unique (iv) its answer is a continuous text span from the paragraph. Avoid creating questions that (i) can be answered correctly without actually understanding the paragraph and (ii) uses same words or phrases given in the passage.

After a nonprofit organization has been formed at the state level, the organization may seek recognition of tax exempt status with respect to U.S. federal income tax. That is done typically by applying to the Internal Revenue Service (IRS), although statutory exemptions exist for limited types of nonprofit organizations. The IRS, after reviewing the application to ensure the organization meets the conditions to be recognized as a tax exempt organization (such as the purpose, limitations on spending, and internal safeguards for a charity), may issue an authorization letter to the nonprofit granting it tax exempt status for income tax payment, filing, and deductibility purposes. The exemption does not apply to other Federal taxes such as employment taxes. Additionally, a tax-exempt organization must pay federal tax on income that is unrelated to their exempt purpose. Failure to maintain operations in conformity to the laws may result in an organization losing its tax exempt status.
How does a US NPO apply for tax exempt status?