The Internal Revenue Service has decided not to alter the tax-exempt status of $57.5 million of bonds issued in 2003 by the Illinois Health Facilities Authority, now the Illinois Finance Authority, after completing an audit that focused on two former board members who pleaded guilty to defrauding Rosalind Franklin University and orchestrating kickback schemes, the issuer disclosed last week.

The Massachusetts Educational Financing Authority also disclosed last week that the IRS has begun an audit of $119.2 million of revenue bonds sold in 1997 as part of its initiative to examine student loan bonds. Both announcements were made in material event notices filed with the Municipal Securities Rulemaking Board's electronic EMMA system.

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