Show Subnavigation

Orders are written statements to implement a decision after a Department administrative hearing. 

A taxpayer may file an appeal with the New Mexico Court of Appeals within 30 days after the date of the decision. Appeals are decided based on the evidence and arguments presented at the administrative hearing. 


All Posts > 2017

10/05/2017

17-42

Jack and Karen Dill

On April 18, 2017, the Department issued a return adjustment notice for personal income tax. On April 28, 2017, the Taxpayer filed a formal protest with the Department. For the tax year at issue, the Taxpayer performed remote work for a company based in New Mexico. The Taxpayer resided in the states of Indiana and New Jersey. The Taxpayer estimated that during the 2016 tax year he was present in the state of New Mexico for approximately 88 days or 24 percent of the year. Based on this calculation, the Taxpayer allocated his income from the New Mexico based company. The Taxpayer relied on information in the statute and the PIT-B instructions to determine how the income from wages should be allocated. The Department adjusted the return to fully allocate the wages from the New Mexico based company to New Mexico for tax purposes and sent out the adjusted refund to the Taxpayer. The Department agreed that the Taxpayer was not a resident of New Mexico during the time at issue. However, the Department asserted that 100 percent of the wages reported by the New Mexico based company were taxable because the Taxpayer was employed in New Mexico. The Hearing Officer determined that the Taxpayer overcame the presumption of correctness and established entitlement to the original refund claimed. The Taxpayer was entitled to apportion and allocation of income based on the percentage of the wages that was made while within the state pursuant to Section 7-2-11(A)(4) NMSA 1978. For the reasons above, the Taxpayer’s protest is granted.


09/28/2017

17-41

Highland Construction LLC

On December 9, 2016, the Department assessed the Taxpayer for gross receipts tax, penalty, and interest for the tax period starting January 1, 2013 through December 31, 2014. On February 8, 2017, Taxpayer filed a formal protest letter with the Department. The Taxpayers business provides construction services. The Taxpayer relies on a bookkeeper for all tax responsibilities. The bookkeeper is only consulted as-needed and is not employed by the Taxpayer. The Taxpayers standard process has been to charge gross receipts tax on all construction services. However, on one occasion the Taxpayer did not charge gross receipts tax to a non-profit organization. The protest is a result of those transactions. The Taxpayer argued that an NTTC was provided by the organization and the organization informed the Taxpayer that because they are a non-profit they do not pay tax. The Taxpayer confirmed there was no consultation with a tax professional regarding the transactions that took place with the non-profits. Based on the Taxpayers current understanding of NTTCs, it has been requested the non-profits pay gross receipts tax that would have been due, to which they refuse. The Taxpayer argues that it should be entitled to the benefit of good-faith because it accepted the NTTC’s originally in good-faith. During the hearing, it was decided that the Taxpayer accepted the clients information without further inquiry, investigation, or due diligence to check if the information provided by the client was correct. The Hearing Officer also noted that the actual NTTC provided notice that it is not to be utilized for construction services. The Hearing Officer determined that the Taxpayer did not overcome the presumption of correctness and that the receipts from performing construction projects for a non-profit organization are fully taxable. Therefore, as no deduction or certificate covered the transaction at issue, the Taxpayer did not establish good-faith acceptance of the NTTCs and is not entitled to safe harbor protection under Section 7-9-43 (A) NMSA 1978. For the reasons listed above, the Taxpayer’s protest is denied.


09/20/2017

17-40

Michael Lunnon

On March 6, 2017, the Department mailed an assessment for personal income tax, penalty and interest for periods starting January 1, 2011 through December 31, 2012. The Department received a formal protest on May 26, 2017. Prior to the assessment being issued by the Department, a limited scope audit was completed. This audit was based on income that was not reported to New Mexico. The Taxpayer responded to the audit indicating that he did not understand the bases for the claim and denied having income in amount specified in the audit notice. During the audit and the protest, the Taxpayer refused to testify about his occupation or his sources of income. However, during the cross examination it was discovered that the Taxpayer manages a business in Gallup. The Department and Hearing Officer were unable to get any further information from the Taxpayer in regards to the business and what kind of payment was received for services performed. The Taxpayer admitted to having a history of disputes with the IRS and argued that the information the Department received from the IRS was not correct. The Department testified that before issuing the assessment the Taxpayer was given the opportunity to ask questions and provide additional information to the Department to reduce the amount of tax owed. The Hearing Officer determined that the Taxpayer did not overcome the presumption of correctness in this case. Based on the information above, the Taxpayer’s protest is denied.


09/15/2017

17-39

Conagra Foods Food Ingredients Co. Inc.

On February 25, 2013 the Department issued an assessment for corporate income tax, penalty, and interest for the reporting periods from May 31, 2008 through May 31, 2011. On March 14, 2013, the Taxpayer submitted a timely protest to the Department. As part of its protest, Taxpayer agreed to a portion of the assessment and included payment for that amount with its protest letter. The Taxpayer is headquartered in Omaha, Nebraska and is a packaged food company. The Taxpayer owned and operated grain elevators in New Mexico. In anticipation of the sale of its grain storage operations the Taxpayer transferred its grain storage operations to a disregarded LLC and sold it. The Department conducted an audit of the Taxpayer’s New Mexico corporate income tax returns and reclassified the interest income earned on the payment in kind (PIK) notes from allocable nonbusiness income to New Mexico apportionable business income. The issue to be determined in this protest is if the interest income is business income apportionable and subject to New Mexico corporate income tax or if it is nonbusiness income, not subject to New Mexico tax under Uniform Division of Income for Tax Purposes Act (UDIPTA) and applicable commerce clause and due process clause requirements. The Taxpayer fully allocated the value of that transaction (including the cash and the value of the PIK notes) and paid the apportioned tax in New Mexico. However, after completion of that sale, Taxpayer allocated the tax on the interest income to its state of domicile, Nebraska. In contrast, the Department in audit determined that the PIK interest was business income from the sale of a line of the business and was subject to apportionment and taxation in New Mexico. The Chief Hearing Officer determined that New Mexico may only tax the interest income earned on the PIK Notes if: 1) Taxpayer and the Buying Parties were engaged in a unitary business or 2) the PIK Notes were used as part of Taxpayer’s unitary business operations in New Mexico. It was determined by the Chief Hearing Officer that the Taxpayer’s PIK income is nonbusiness income not subject to apportionment under UDIPTA. Since the Taxpayer is no longer in that line of business, has no ownership interest and the interest income received at this point it is simply investment income not related to a unitary business enterprise or Taxpayer’s line of business. Taxpayer’s subsequent interest income from PIK notes amounted to non-business income under UDIPTA because the income did not meet the transactional test, the dispositional test, or the functional test articulated under the definition of business income. The nonbusiness interest income in this protest was not apportionable to New Mexico under UDIPTA and instead was properly allocated to Nebraska, Taxpayer’s state of domicile. For the foregoing reasons, Taxpayer’s motion for summary judgment is granted and Taxpayer’s protest is granted, the remaining assessed tax, penalty and interest is ordered abated.


09/13/2017

17-38

State Construction

On January 5, 2017, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the reporting periods starting January 1, 2010 through December 31, 2014. On February 3, 2017, the Taxpayer filed a timely formal protest letter with the Department. During the time at issue, the Taxpayer worked as a handyman and personal assistant. The Taxpayer was sometimes reimbursed for certain expenses incurred while working for certain customers. The Taxpayer separately stated the reimbursements and did not charge gross receipts tax on that amount to customers. On the Taxpayer’s federal Schedule C, reimbursement were included in the Taxpayer’s gross receipts. The Taxpayer argued that in certain circumstances, it would have been obvious to certain individuals that the Taxpayer was acting on behalf of a third party. For places that the Taxpayer frequented regularly on behalf of customers a statement was prepared and presented to the seller to sign. The Taxpayer explained that these statements were to establish knowledge that the Taxpayer was purchasing goods or services in a disclosed agent capacity. The matter to be decided in this hearing is whether certain reimbursed expenses are subject to gross receipts tax. The Taxpayer argues that gross receipts tax should not be due on the reimbursed expenditures because he incurred the expenses as an agent on behalf of a customer while acting in a disclosed agency capacity. The Department asserted that such receipts were subject to tax because there is insufficient evidence to find that the Taxpayer was a disclosed agent of his customers when incurring the expenditures. The Taxpayers invoices met the bookkeeping requirements in Regulation 3.2.1.19 (C) NMAC, because the reimbursements were separately stated on the invoice. However, the Taxpayer’s evidence failed to establish the existence of a disclosed agency relationship in which the Taxpayer had the power to bind his customer in contract with a third party. The Taxpayer provided a brief unsworn statement from one of his customers indicating that he was “an agent and assistant” to his customer. The Hearing Officer determined that there is no suggestion that the Taxpayer had the authority to bind the customer to an obligation that the Taxpayer created. The Hearing Officer determined that the Taxpayer did not overcome the presumption of correctness to establish that the Taxpayer was a disclosed agent for his customers for the reimbursed expenditures or for the penalty associated with the assessment. For the reasons above, the Taxpayer’s protest is denied.


09/13/2017

17-37

Permian Machinery Movers Inc.

On December 17, 2015, the Department assessed the Taxpayer for corporate income tax, gross receipts tax, penalty, and interest. On March 16, 2016, the Taxpayer filed a timely formal protest with the Department. The Taxpayer rents, sells, buys, trades, and services lift equipment, including forklifts and scissor lifts. It also sells replacement parts and accessories for lift equipment and provides training in proper operation of such equipment. The Taxpayer is located in El Paso, Texas. During the time at issue, the Taxpayer was providing services and delivery of sold items in New Mexico. The Taxpayer explained that the tax for those transactions was remitted to the state of Texas. The Taxpayer believed that the state of New Mexico did not impose a sales tax. At the time, the Taxpayer did not have knowledge that New Mexico has a gross receipts tax in place of a sales tax. During an audit review of the Taxpayers records, the transactions that were for customers with billing addresses in New Mexico made up the amount of gross receipts that were assessed by the Department. The Taxpayer withdrew the protest against the assessment on corporate income tax and the associated penalty and interest. The issue to be determined during this protest is if the gross receipts were subject to New Mexico gross receipts tax. During the protest, the Taxpayer argued that some of the transactions should have been excluded from the audit findings, that credit for taxes paid to Texas should be granted, and that a portion of the assessment should not apply due to the statute of limitations. During the hearing, the Taxpayer provided information that the accounting system that they use indicates that some of the transactions were delivered when in fact they were picked up by the customer at its Texas based location and others were for services performed for the customer in Texas. The Hearing Officer determined that based on the computer issue and the explanation of the transactions against the definition of gross receipts that a partial abatement of specific gross receipts should be allowed. However, the Hearing Officer did determine that the assessments starting December 31, 2008 were timely per Section 7-1-18(C) NMSA 1978. It was also determined that for the remaining transactions the Taxpayer did not overcome the presumption of correctness and failed to establish a right to a credit for taxes paid or for the abatement of penalty. The Taxpayer is ordered to pay the tax, penalty and interest after the Department’s abatement. The Taxpayer’s protest was granted in part and denied in part.


08/31/2017

17-36

Eastern Sunbelt Real Estate

On February 23, 2016, the Department assessed the Taxpayer for gross receipts tax for the periods starting January 1, 2011 and ending December 31, 2012. On April 21, 2016 the Taxpayer filed a timely formal protest with the Department. The Taxpayer was unable to obtain the additional documents needed because the accountant that handled the returns filed for the time in questions is deceased. The Department determined that the Taxpayer had filed a Schedule C for the tax years in question and did not pay gross receipts tax on the transactions. At the hearing, the Department acknowledged the Taxpayer provided sufficient proof during the protest to show that the Taxpayer that was assessed was not responsible for the gross receipts tax owed. Therefore, the Hearing officer determined that the Taxpayer was not involved in the transactions and did not owe any tax. However, the Hearing Officer did note that this decision would not prohibit the Department from assessing the appropriate taxpayer. For the forgoing reasons, the Taxpayer’s protest is granted.


08/08/2017

17-35

All Medical Personnel Inc.

On May 5, 2016, the Department issued an assessment for gross receipts tax, penalty, and interest for the periods starting March 31, 2009 and ending September 30, 2015. The Taxpayer filed a timely protest of the assessment on July 27, 2016. The Taxpayer is a staffing agency that specializes in finding and recruiting medical professionals and then facilitates the staffing and payment of those medical professionals. The Taxpayer argued that they do not owe gross receipts tax to the state because it is a joint employer with businesses in New Mexico, has no physical presence, office, or staff in New Mexico. Third, the Taxpayer argues that based on Public Law 86-272 under 15 USCS Section 381 it believes that it has de minimus activities in New Mexico. Lastly, the Taxpayer argues that even if it was subject to tax it would be able to claim a healthcare deduction. The Department argues that gross receipts tax is due for the service that is being provided and the employees that the Taxpayer has working in New Mexico. Based on the service agreement that was provided at the time of the hearing, it was clear that the Taxpayer was an independent contractor responsible for locating employees, paying the employees, making sure that the employees had benefits, collection of any tax based withholdings, and workers compensation insurance. It was specified that the Taxpayer does not lease employees. However, the Taxpayer was being paid for the employee services and not the worker directly. The Taxpayer argued that based on the work that is performed that it is able to claim a deduction that applies to medical. The Hearing Officer determined that the Taxpayer does not fit the qualifications of the deduction mentioned. The Hearing Officer did bring up that a certain part of the assessment was beyond the statute of limitations. The Department noted that when the audit was completed it was only for January 2010 forward. The Hearing Officer determined that the Taxpayer is subject to gross receipts tax in New Mexico. The Taxpayer provides a service and employees workers who work in facilities in New Mexico. The Taxpayer also benefits monetarily for that exchange of service. The Hearing Officer ordered that the assessed reporting periods March 31, 2009 through November 30, 2009 be stricken from the assessment as they were found to be beyond the statute of limitation. It was further ordered, the amount of the assessment which resulted from the audit be carefully reviewed and anything from the 2009 periods mentioned above to make sure that any of that liability is removed from the amount due. The Department is then to provide the Taxpayer with a statement of account for current outstanding liabilities and update all interest calculation. When the information is provided to the Taxpayer they are to pay the updated gross receipts tax, penalty, and interest. For the reasons listed above, the Taxpayers’ protest is partially granted and is partially denied.


07/31/2017

17-34

Peabody Coalsales Company

On February 27, 2016, the Department denied the Taxpayer’s claim for refund for periods 2011 through 2012. The Taxpayer filed a timely a timely protest on April 21, 2016. The issue to be decided is if the Taxpayer is entitled to deduct sales of coal from its gross receipts when those sales were made in lots in excess of 18 tons to a power plant that used the coal to produce electricity. The Taxpayer argument is that it was entitled to deduct its sales of coal to the power plant from its gross receipts per Section 7-9-65 NMSA 1978. The Taxpayer argues that a plain reading of the statute and regulation can lead to the conclusion that coal is a chemical based on the regulations definition and can be allowed in the deduction. The Department argues that the Taxpayers argument is against the purpose of regulations. Regulations are used to help further define and narrow the applicability of deductions not to overstep the statute. The first step in statutory interpretation is to look at the plain language of the statute and refrain from further interpretation if the plain language is clear. The Hearing Officer also noted that when statutes and regulations are inconsistent, the statute prevails. The Hearing Office stated that the interpretation of statutes should be done by keeping in mind legislative intent and in a way that does not lead to absurd, unreasonable, and unjust results. The Hearing Officer determined after looking at legislative history and the information presented that the statute is related to the processing of ores or oil. It was also concluded that the burning of coal to produce electricity is not an activity related to the processing of ores or oil. The statute must be read in its entirety and a single phrase of a statute cannot determine the statutes intent. The Hearing Officer determined that coal is for producing heat which is used in the processes of making electricity and is not a chemical under the statute or regulation because it is not used for producing a chemical reaction. The Taxpayer failed to establish that it was entitled to the deduction. For the reasons mentioned above, the Taxpayer’s protest is denied.


07/31/2017

17-33

Michael Trujillo

On April 30, 2015, the Department assessed the Taxpayer for personal income tax, penalty, and interest for the tax years 2007 through 2013. On July 29, 2015, the Taxpayer filed a timely protest with the Department. On October 9, 2015, the scheduled hearing was conducted. At the time of the hearing, the protest was consolidated with two related protests and the Taxpayer requested that the protest be held back as the parties were working on a settlement. The request was granted and the hearing was rescheduled for July 20, 2017. Two of the protests were withdrawn by the Taxpayer before the final hearing took place. During the time at issue, the Taxpayer was in business as a valet and parking services for events. The Taxpayer admitted to not keeping good records of his business activity for the time at issue. In 2014, the Department began an audit of the Taxpayer and his business. Due to poor record keeping, the Department used an extrapolation and average method to determine the tax owed. The auditor at the time determined that the Taxpayer willfully failed to provide documentation for the time period at issue and assessed a fraud penalty. During, the protest the Taxpayer was able to provide better documentation with the help of a CPA. Based on the documentation submitted, the Department started using the bank deposit method to calculate the tax owed. The Department also changed position and determined that the Taxpayer’s failure to report and pay timely was due to negligence. Based on the information above, the Department was able to recalculate the tax owed and assessed. The Hearing Officer determined that based on the new information provided the Department’s recalculated liability is reasonable. The Hearing Officer called for a partial abatement of the original assessment. The Taxpayer’s protest is denied in part and granted in part. 


06/30/2017

17-32

Martin D. Moore Eunice Sports Broadcasting

On February 17, 2016, the Department assessed the Taxpayer for gross receipts tax, penalty, and interest. The initial assessment was never protested. On March 2, 2017, the Department issued a warrant of levy for the unpaid amount due. On March 14, 2017, the Taxpayer filed a formal protest of the warrant of levy. In the protest, the Taxpayer argued against the original assessments claim. As the protest was for the warrant of levy the issue to be decided is if the warrant of levy based on the assessment was in accordance with the law. The Taxpayer is still allowed to discuss his defense against the original assessment. The Taxpayer acknowledged receiving the original assessment but stated that he was not aware of his rights to protest the assessment at that time. The Hearing Officer takes notice that the Department sends out a document with each assessment which addressees the Taxpayers right to protest. If the taxpayer fails to file a protest within the required time, the secretary can enforce collection of tax if the taxpayer is delinquent in paying the amount due per Section 7-1-16 NMSA 1978 and Section 7-1-24 NMSA 1978. The Hearing Officer determined that there is no jurisdiction to consider the claims and the defense that the Taxpayer presented to the assessment as there is no authority under the law to dispute an assessment after the protest period has passed. In this case, when the Taxpayers liability was not paid and had not protested the Department pursued collection activities. Per Section 7-1-31 NMSA 1978 the Department can pursue collection by levy on all property of the taxpayer. The Hearing Officer determined that the warrant of levy was executed correctly by the Department. For the reasons above, the Taxpayer’s protest is denied.


06/29/2017

17-31

David B. Graham

On December 13, 2016, the Department assessed the Taxpayer for personal income tax, interest, and penalty for the periods January 1, 2009 through December 31, 2015. On March 3, 2017, the Taxpayer filed a formal protest with the Department. In 2011, the Taxpayer started horseracing activities. From 2012 through 2015, the Taxpayer incurred expenses based on the horseracing activities and with those losses he claimed deductions against his personal income tax. The Department argues that the activities for 2012-2015 were not for profit and therefore cannot be used in the deduction. However, the Department acknowledged that the assessment of personal income tax for 2009 and 2011 in this case was in error because they were not within the applicable statute of limitations. The Taxpayers argument is that he has a plan and purpose for the activities and expects to make income throughout his retirement from the horseracing profits. The Departments disallowance follows suit with the federal deduction for expenses incurred while engaging in trade or business per 26 USCS Sec 162. The deduction is disallowed when the activity being engaged in is found to not be a for-profit activity, The Hearing Officer decided to use the nine factor test in federal regulation to determine if the activity was for profit during the time at issue. The factors are: 1) the manner in which the person carries on the activity; 2) the expertise of the person and his or her advisors; 3) the time and effort put into the activity; 4) the expectation that assets may appreciate in value; 5) the person’s success in carrying on similar or dissimilar activities; 6) the history of income or loss with respect to the activity; 7) the amount of profits earned; 8) the financial status of the person; and 9) the elements of personal pleasure and recreation. Based on the information presented, the Hearing Officer determined that the activity was not motivated by profit. The Hearing Officer concluded that the Taxpayer did not overcome the presumption of correctness and establish a right claim to the deduction. The Hearing Officer concluded that interest is mandatory by statute and was assessed correctly, the Taxpayer is liable for the penalty due and the disallowance of the deduction for 2012 through 2015 was reasonable therefore the Taxpayers protest based on these periods is denied. The Hearing officer determined that the Department lacked the authority in this case to assess taxes prior to 2012 and believes that the Taxpayers protest should be granted for tax years 2009 through 2011. For the reasons above, the Taxpayer’s protest was granted in part and denied in part.


06/28/2017

17-30

Kelly A. Day

On September 7, 2016, the Department issued a notice of assessment and demand for payment for the tax year 2009. On August 31, 2016, the Department issued a notice of assessment and demand for payment for the tax year 2010 and 2011. On September 22, 2016, the Taxpayer filed a formal protest with the Department. The Taxpayer paid all taxes due for tax years at issue and the Department waived all penalties for tax years 2009-2011. On December 15, 2016, the Taxpayer submitted a formal protest seeking a refund for the taxes paid for tax years 2009-2011. On March 29, 2017, the Taxpayer submitted a memorandum of law arguing that the assessment of interest in this case violates the US and New Mexico constitution. On April 5, 2017, the Taxpayer submitted a memorandum of law arguing that the Taxpayer should be awarded attorney’s fees. For the periods at issue, the Taxpayer was classified as an independent contractor by the business she was working for. The Taxpayer filed forms with the Internal Revenue Service (IRS) to submit facts showing that she was an employee not an independent contractor. The IRS confirmed and accepted those facts on March 14, 2016. As a result, the Taxpayer filed amended returns for the time at issue. During the hearing, the Taxpayer argued that the assessment of interest was a violation of the United States Constitution. It was also argued that the error in employment status was the employers and not the taxpayers. The Department recognized that the Taxpayer filing of a late return was not due to negligence based on the timely original returns that were filed with the Department so penalty was abated. However, the Department recognizes that it does not have the statutory authority to abate interest. The Hearing Officer determined that based on Section 7-1-18 (A) NMSA 1978, the department is not barred from assessing any taxes or interest against a taxpayer based on amended returns. Based on the result from the IRS determination the Taxpayer had 180 days to file an amended return with the Department. The Hearing Officer determined that based on when the amended returns were submitted to the Department and Section 7-1-18 (E) NMSA 1978; the Department may assess the taxpayer for liabilities owed until the end of 2019. The Hearing Officer determined that the Department did not violate the US or New Mexico constitutions and that the Taxpayer is liable for the interest due for the time at issue. As the Taxpayer is not the prevailing party in the administrative proceedings the Taxpayer is not entitled to any costs or fees. For the reasons listed above, the Taxpayer’s protest is denied.


06/21/2017

17-29

Dustin R. and Clarissa Ptolemy

On December 5, 2016, the Department issued an assessment for personal income tax, interest, and penalty for the periods starting January 1, 2011 through December 31, 2015. On February 15, 2017, the Taxpayers submitted a formal protest letter which was acknowledged by the Department on March 13, 2017. The Taxpayer started activities in the agriculture and farming field in 2011. The Taxpayers have since purchased cattle and have tried different business strategies with the goal of having a profitable agricultural and ranching business. When starting the business the Taxpayers both had full time jobs and in the beginning of 2017 decided to pursue the agricultural and ranching activities full time. The Taxpayers have seen a loss from their activities since 2011 but the Taxpayers believe that 2016 will be showing a profit on the activities. However, based on the adjustments for prior year losses and depreciation they are unsure what the 2016 tax returns will show. The Taxpayers argue that there have had losses while starting the business and they are starting to see profits. The Department argues that the deduction for the losses was denied and assessed because the activity during the time at issue was not a for-profit activity. The Hearing Officer determined that the decision on the profit status of the business will be based on 26 U.S. Code § 183and the federal 9 factor test. Federally, the deduction of losses in excess of profits is disallowed when the activity being engaged in is found to not be a for-profit activity. The 9 factors are: 1) the manner in which the person carries on the activity; 2) the expertise of the person and his or her advisors; 3) the time and effort put into the activity; 4) the expectation that assets may appreciate in value; 5) the person’s success in carrying on similar or dissimilar activities; 6) the history of income or loss with respect to the activity; 7) the amount of profits earned; 8) the financial status of the person; and 9) the elements of personal pleasure and recreation. The Hearing Officer determined that six out of the nine factors weigh in favor that the activity is for-profit and that the losses in the startup years of a business are fairly common and should not be used against the Taxpayers. The Hearing Officer determined that the Department’s disallowance of the deduction was not reasonable and that the Taxpayers overcame the presumption of correctness. The Hearing Officer decided that the Taxpayers’ tax, penalty and interest should be abated based on the reasons listed above. The Taxpayers’ protest is granted.


06/14/2017

17-28

Hyundai Corporation USA

On August 12, 2016, the Department issued a Notice of Assessment of Taxes and Demand for Payment of withholding tax penalty and interest for the period ending June 30, 2016. The formal protest was received by the Department on October 4, 2016. The Taxpayer is asking for relief of the penalty and interest owed due to modifications of the Taxpayers internal computer networking system that resulted in an employee not having access to the Departments online filing system during the time at issue. In the protest letter, an employee of the Taxpayers noted that they believed they had until July 31, 2016 to file and make a payment for the tax due for the period at issue. The Taxpayer filed its return and payment on July 28, 2016. The Department confirmed that the return and the payment due date for that reporting period was July 25, 2016. The untimely filed return resulted in the assessment showing penalty and interest due for the period at issue. The Taxpayer did not disagree that the payment and return were late but is asking for leniency due to the circumstances. The Hearing Officer determined that the assessment of interest is mandatory and the Department has no legal authority to abate it. For the issue of penalty, the Hearing Officer Determined that the Taxpayer failed to establish that it was entitled to an abatement of penalty. For the reasons above, the Taxpayer’s protest is denied.


Next
View Our Most Popular Pages & Services
Latest News:
Governor Susana Martinez

Governor Susana Martinez

Learn more about governor Martinez
Secretary Demesia Padilla

Secretary Demesia Padilla,CPA

Learn more about secretary Padilla

Online Services

Find an Online Service to Serve Your Needs

Taxation and Revenue New Mexico

1100 South St. Francis Drive
Santa Fe, NM 87504
(505) 827-0700

TRD Home          Privacy & Security          Site Policies          Accessibility/Non-Discrimination Statement          
About Us          Contact Us      Site MapLink to New Mexico Tax and Revenue Facebook Page

call us E-Mail Contact Us