Robert Pineda

00-38

The Taxpayer is a certified public accountant engaging in business in New Mexico. The Department conducted an audit of the Taxpayer’s gross receipts tax reporting using the Taxpayer’s bank records. Based on the Taxpayer’s bank deposits, the Department assessed the Taxpayer gross receipts tax, penalty and interest for 1995 and 1996. The penalty portion of the assessment was made pursuant to Section 7-1-69(B) NMSA 1978 (1996), which imposes a 50% civil penalty for failure, with intent to defraud the state, to pay when due any amount of tax required to be paid. The Taxpayer protested the assessment stating that the bank deposits on which the assessment was based did not represent business income but represented loans, proceeds from the sale of personal assets, and gifts. Held: The Taxpayer did not meet his burden of proving that the Department’s assessment of gross receipt tax and interest was incorrect. The Department did meet its burden of proving that the Taxpayer’s failure to pay the gross receipts tax reflected in the assessment was motivated by an intent to defraud the state, and the Taxpayer is subject to the 50% penalty imposed pursuant to Section 7-1-69(B) NMSA 1978 (1996).