If a New Mexico taxpayer misses the 30-day deadline to protest a tax assessment, can the Administrative Hearings Office still review the assessment on the merits?

Plain-English summary

Gilman Construction lost its case because it never protested a gross receipts tax assessment within the 30-day window the law allows, then failed to show up at the hearing on the one issue left — whether its late protest was timely. Protest DENIED.

In January 1998, the firm filed a CRS-1 return reporting $6,554.45 of gross receipts and $417.84 of gross receipts tax for the July–December 1997 period, but enclosed no payment. In April 1998 the Department issued Assessment No. 2218834 (tax, penalty, and interest, netting $551.88 after a partial payment). The Department had no record that the firm ever protested that assessment. A separate, earlier Assessment No. 2008796 (February 1996) was also outstanding.

After a March 2001 Department collection letter, the firm wrote back in April 2001 trying to dispute both assessments. The Department replied that the April 2001 letter could not count as a protest because Section 7-1-24 requires a protest to be filed within 30 days of the assessment date. The firm then protested that ruling, and the Department treated this narrow challenge — to its untimeliness determination — as a timely protest for hearing.

The only issue was timeliness, and the firm did not appear

The sole question was whether the firm had filed timely protests. Assessment No. 2008796 had since been abated in the firm's bankruptcy, so every issue about it was moot. As to Assessment No. 2218834, the hearing officer mailed notice of the May 3, 2002 hearing (signed for by Diane Gilman on March 23, 2002), but no one appeared for the firm. The firm presented no evidence that a timely protest had ever been filed, and the Department testified it had no record of one. With the 30-day deadline unmet and nothing to rebut the Department's showing, the untimeliness determination was proper.

Result: protest DENIED. The issues on the bankruptcy-abated assessment were moot; the late protest of the remaining assessment could not be heard on its merits.

What this means for you

The 30-day protest deadline is jurisdictional in practice

Under Section 7-1-24, you must protest a New Mexico tax assessment within 30 days of its date. Miss it, and the Administrative Hearings Office cannot reach the merits — a later letter disputing the assessment does not revive your right to protest.

A collection letter years later does not reopen the deadline

Receiving a Department collection notice long after an assessment does not restart the protest clock. If you believe an old assessment is wrong, the time to say so was within 30 days of the original assessment.

Show up and bring proof

If you get a hearing, appear and produce evidence. A no-show, with no proof that a timely protest was ever filed, leaves the Department's determination — backed by the presumption that its records are correct — unrebutted.

Bankruptcy can moot an assessment

An assessment abated in bankruptcy is no longer live; disputes about it become moot. That relief comes through the bankruptcy, not through a late tax protest.

Common questions

Q: What tax was involved?
A: Gross receipts tax — Assessment No. 2218834 arose from $417.84 of gross receipts tax reported for July–December 1997 that the firm did not pay with its return.

Q: Why couldn't the assessment be reviewed on the merits?
A: Because the firm never protested within the 30 days required by Section 7-1-24. The only thing the hearing officer could decide was whether the late protest was timely — and it was not.

Q: What happened to the other assessment?
A: Assessment No. 2008796 was abated in the firm's bankruptcy, so all issues about it were moot.

Q: Did the firm's April 2001 letter count as a protest?
A: No. It came years after the assessment, well outside the 30-day window, so it could not be treated as a valid protest.

Q: Did anyone appear for the firm at the hearing?
A: No. Despite receiving notice, neither the owner nor a representative appeared, and no evidence of a timely protest was offered.

Citations and references

Statutes:

• NMSA 1978, § 7-1-24 — a protest to an assessment must be filed within 30 days of the date of the assessment

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Gilman Construction
• Decision PDF: D&O 02-12

Original ruling text

BEFORE THE HEARING OFFICER
OF THE TAXATION AND REVENUE DEPARTMENT
OF THE STATE OF NEW MEXICO

IN THE MATTER OF THE PROTEST OF
GILMAN CONSTRUCTION, NO. 02-12
ID NO. 02-220042-00-8, PROTEST TO THE
DEPARTMENT’S DETERMINATION OF AN
UNTIMELY PROTEST TO ASSESSMENT
NOS. 2218834 AND 2008796

DECISION AND ORDER

This matter came on for formal hearing on May 3, 2002 before Gerald B. Richardson,

Hearing Officer. Gilman Construction, hereinafter, “Taxpayer”, failed to attend the hearing,

either through its owner, Michael J. Gilman, or through a representative. The Taxation and

Revenue Department, hereinafter, “Department”, was represented by Javier López, Special

Assistant Attorney General. Based upon the evidence and the arguments presented, IT IS

DECIDED AND ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. On January 15, 1998, the Taxpayer filed a CRS-1 return with the Department

reporting $6,554.45 in gross receipts during the reporting period of July 1, 1997 through

December 31, 1998. The return further reported $417.84 in gross receipts tax due on those

receipts. The Taxpayer failed to enclose payment of the gross receipts tax due with the return it

submitted to the Department.

2. As a result of the Taxpayer’s failure to pay the gross receipts tax due for the reporting

period of July, 1997 through December, 1997, on April 14, 1998, the Department issued

Assessment No. 2218834, assessing $417.84 in gross receipts tax, $36.04 in penalty, $169.76 in

interest and applying a payment of $71.76, resulting in an assessment of $551.88.

1

3. The Department has no documents or other records to show that Assessment No.

2218834 was protested by the Taxpayer pursuant to Section 7-1-24 NMSA 1978.

4. On February 28, 1996, the Department issued Assessment No. 2008796 to the

Taxpayer.

5. On March 29, 2001 the Department sent the Taxpayer a letter with respect to certain

liabilities and non-filed tax reports.

6. As a result of that letter, on April 4, 2001 the Taxpayer wrote a letter to the

Department disputing the allegations of the Department’s letter and attempting to dispute

Assessment Nos. 2008796 and 2218834. The Department has since lost its copy of the

Taxpayer’s April 4, 2001 letter.

7. In response to the Taxpayer’s April 4, 2001 letter, on April 11, 2001 the Department

sent a letter to the Taxpayer informing it that its April 4, 2001 letter could not be considered a

protest to Assessment Nos. 2008796 and 2218834 because it was not timely under the

requirement of Section 7-1-24 that protests to assessments be filed within thirty days of the date

of an assessment.

8. On April 20, 2001, the Taxpayer wrote back to the Department protesting the reply he

received to his letter of April 4, 2001. The Department treated this as a timely protest of its

determination that the Taxpayer had failed to file a timely protest to Assessment Nos. 2008796

and 2218834.

9. On March 21, 2002, the Hearing Officer mailed a certified letter to the Taxpayer

informing it that a formal hearing on its protest to the Department’s determination of an untimely

protest would be held on May 3, 2002 at 1:00 PM in the Department’s offices in Santa Fe.

2

10. The return receipt for the Department’s March 21, 2002 letter informing the Taxpayer

of the formal hearing date was signed for as received by Diane Gilman on March 23, 2002.

11. No person or representative for the Taxpayer appeared at the formal hearing on May

3, 2002.

12. Assessment No. 2008796 has been abated by the Department as a result of the

Taxpayer’s bankruptcy.

DISCUSSION

The sole issue to be determined herein was whether the Taxpayer had filed timely

protests to the Department’s assessments. With respect to Assessment No. 2008796, the

Department has abated it and all issues concerning that assessment are now rendered moot. With

respect to Assessment No. 2218834, the Taxpayer failed to present any evidence that a timely

protest was filed with the Department in accordance to the requirements of Section 7-1-24

NMSA 1978. The Department presented testimony that it had no record of a timely protest to

said assessment. Thus, the Department’s determination that the Taxpayer had failed to file a

timely protest to Assessment No. 2218834 was a proper one and the Taxpayer’s protest must be

denied.

CONCLUSIONS OF LAW

1. The Taxpayer filed a timely written protest to the Department’s determination of an

untimely protest to Assessment Nos. 2008796 and 2218834 and jurisdiction lies over the parties

and the subject matter of this protest.

2. All issues related to Assessment No. 2008796 are now moot.

3. The Taxpayer failed to file a timely protest to Assessment No. 2218834 pursuant to

Section 7-1-24 NMSA 1978.

3
For the foregoing reasons, the Taxpayer’s protest IS HEREBY DENIED.

DONE this 6th day of May, 2002.

4