43-1212. Denial of exempt status due to
prohibited transactions
An organization shall be denied exemption from taxation under section 43-1201,
paragraph 4 by reason of "prohibited transactions" as defined in section 43-1213 only for
taxable years subsequent to the taxable year during which it is notified by the
department that it has engaged in a prohibited transaction, unless such organization
entered into such prohibited transaction with the purpose of diverting corpus or income
of the organization from its exempt purposes and such transaction involved a substantial
part of the corpus or income of such organization. Denial of exemption for the
unreasonable accumulation of income shall be effective in the taxable year of the
accumulation.
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