Tax-exempt organizations are groups that do not have to pay federal income taxes because they serve a public purpose. These organizations typically include charities, religious institutions, and educational entities. To qualify for tax-exempt status, they must meet specific criteria set by the Internal Revenue Service (IRS) and operate primarily for charitable, educational, or religious purposes. One of the most common types of tax-exempt organizations is classified under Section 501(c)(3) of the Internal Revenue Code. Donations made to these organizations are often tax-deductible for the donor, encouraging public support. However, tax-exempt organizations must adhere to strict regulations to maintain their status.