A student housing organization does not qualify for tax-exempt status and cannot finance projects with tax-exempt bonds because it fails to meet several charitable criteria, the Internal Revenue Service concluded in a private-letter ruling released last week.

"You have failed to establish that your operations will further a charitable purpose and that you will not be operat[ing] for a substantial non-exempt private purpose," the IRS stated in the ruling. "Providing housing for students in the manner you have described, absent special facts and circumstances, is a trade or business that is not a charitable activity."

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