Howard L. Bancroft, III

01-29

The Department assessed the Taxpayer for personal income tax, penalty and interest for tax years 1992, 1993 and 1994.  The Taxpayer protested, raising the following issues: 1) the Department should be required to enter into a settlement agreement with the Taxpayer on the same terms he settled with the IRS; and 2) the Taxpayer should be excused from payment of penalty because his decision not to file New Mexico personal income tax returns was based on the advice of his attorney. Held: New Mexico law requires the existence of a good faith doubt before the Department is authorized to enter into a settlement agreement and does not permit settlement on the same grounds offered by the IRS; the Taxpayer’s failure to file a tax return, request an extension of time to file or make estimated payment of taxes due was negligent and was not excused by the advice provided by his attorney.  Protest denied.