Kelly A. Day

17-30

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.