Could the Kuriyans recover a $14,957 income-tax refund after two timely claims went unanswered when they did not protest or sue within 210 days of either filing?

Plain-English summary

Jacob and Jeanne Kuriyan lost a $14,957 personal income tax refund because they did not challenge the Department's inaction within 210 days after either of two timely claims. Filing a second timely application did not preserve the first claim, and the second later became stale for the same reason.

On their October 2010 return, the Kuriyans reported a $19,757 overpayment for 2009. They asked that $4,800 be applied to 2010 estimated tax and that the remaining $14,957 be refunded.

The Department did not grant or deny the refund within 120 days. The Kuriyans did not file an administrative protest or district-court action by May 12, 2011, the 210th day after the claim.

A second Department-supplied application was also timely

In 2013, the Department determined that it lacked the Kuriyans' 2008 return, apparently leaving the account on hold. The Kuriyans resubmitted that return, and their CPA made several status calls.

In December, the Department sent three refund applications for separate years. The Kuriyans completed and mailed all three together before December 31, 2013. The Department paid two, corroborating their testimony that the 2009 application was also timely in the envelope.

The same 210-day preservation rule applied again

The Department again took no action within 120 days, this time by April 23, 2014. The Kuriyans did not protest or sue by July 22, 2014, the second claim's 210-day deadline.

Under Section 7-1-26 and Kilmer v. Goodwin, the Department then lacked authority to grant that stale claim. By the time it formally denied the refund in January 2015, the general limitation period had also expired.

Processing failures and phone calls did not create estoppel

The AHO recognized the frustration of submitting two timely claims that the Department failed to process. But the Legislature placed responsibility on taxpayers to preserve an unanswered claim.

The CPA's calls produced no promise that the specific refund would be approved, and the taxpayers had professional representation capable of researching the statutory remedy. Equitable estoppel could not authorize an act contrary to the express refund statute.

Result: protest DENIED. Both timely claims became stale because neither was preserved through a protest or lawsuit within 210 days.

What this means for you

Taxpayers whose refund claim is unanswered

Calendar three dates immediately: filing, the 120th day of Department inaction, and the 210th day by which a protest or lawsuit must preserve the claim.

Taxpayers submitting a replacement claim

A second filing starts its own action timeline but does not revive an abandoned first claim. Monitor and preserve each claim independently.

Accountants following up by phone

Status calls do not substitute for a statutory protest or court action. Maintain written claim records and escalate formally before the deadline.

Common questions

Q: Was the October 2010 claim timely?
A: Yes, but it became stale when no protest or lawsuit was filed by May 12, 2011.

Q: Was the December 2013 application timely?
A: Yes. Payment of two other applications from the same envelope corroborated timely mailing.

Q: Why did the second claim fail?
A: The Department did not act, and the Kuriyans did not protest or sue by July 22, 2014.

Q: Did Department mistakes preserve the claims?
A: No. Processing problems and status calls did not override the statutory preservation rule.

Q: What refund amount was denied?
A: $14,957 for the 2009 tax year.

Citations and references

Statute:

• NMSA 1978, § 7-1-26 — refund limitation, 120-day Department action period, and 90-day protest or lawsuit window

Cases cited:

• Kilmer v. Goodwin, 2004-NMCA-122 — stale refund claims, taxpayer preservation duty, and limits on equitable relief
• Tiffany Construction Co. v. Bureau of Revenue, 1976-NMCA-127 — taxpayer duty to determine tax consequences

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Jacob & Jeanne Kuriyan
• Decision PDF: D&O 15-40

Original ruling text

STATE OF NEW MEXICO
ADMINISTRATIVE HEARINGS OFFICE
TAX ADMINISTRATION ACT

IN THE MATTER OF THE PROTEST OF
JACOB & JEANNE KURIYAN No. 15-40
TO DEPARTMENT’S DENIAL OF REFUND ISSUED UNDER
LETTER ID NO. L1600681936

DECISION AND ORDER

A protest hearing occurred on the above captioned matter on November 16, 2015 before

Brian VanDenzen, Esq., Interim Chief Hearing Officer, in Santa Fe. At the hearing, Dr. Jacob

Kuriyan appeared pro se for Jacob & Jeanne Kuriyan (“Taxpayers”). Staff Attorney Cordelia

Friedman appeared representing the State of New Mexico Taxation and Revenue Department

(“Department”). Protest Auditor Sonya Varela appeared as a witness for the Department.

Taxpayers Exhibits #1 through #4 were admitted into the record. Department Exhibit A through

E were admitted into the record. The record was left open for the Department to submit a blank

copy of the applicable application of refund form at the time, RPD Form #4107 (rev. 8/2/2012),

discussed repeatedly at hearing. The record closed and this matter became ripe for decision when

the Department filed the correct version of that RPD form on November 24, 2015. Based on the

evidence and arguments presented, IT IS DECIDED AND ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. On January 13, 2015, under letter id. no. L1600681936, the Department denied

Taxpayers’ claim for $14,957.00 in refund of 2009 New Mexico personal income tax. That letter

stated that for the Department “[t]o consider such a claim, New Mexico statutes require that it be

filed within three (3) years of the end of the calendar year in which payment was due, Section 7-

1-26 NMSA 1978.” [Dept. Ex. E].

2. On April 9, 2015, Taxpayer submitted a protest to the Department’s denial of the

claim for refund.

3. On April 22, 2015, the Department’s protest office acknowledged receipt of a

valid protest.

4. On June 16, 2015, the Department filed a request for hearing in this matter with

the Hearings Bureau1.

5. On June 16, 2015, the Administrative Hearings Office set this matter for a

telephonic scheduling hearing on July 7, 2015.

6. On July 7, 2015, a scheduling hearing in fact was held. Neither party objected that

holding the scheduling hearing satisfied the 90-day hearing requirement of the statute.

7. On July 7, 2015, the Administrative Hearings Office issued Notice of

Administrative Hearing, setting a merits hearing in this matter on November 16, 2015 at 1:30

p.m.

8. The hearing on the merits occurred on November 16, 2015. At the end of the

hearing, the record was left open for the limited purpose of production of the applicable version

of RPD form 4107, which although discussed repeatedly by both parties throughout the hearing,

had not been provided into the record by either party.

9. On November 17, 2015, Taxpayers filed a letter with the Administrative Hearings

Office arguing the merits of the case and raising complaints not addressed at hearing.

10. On November 18, 2015, the Department filed its response to Taxpayers’

submission.

11. On November 19, 2015, Taxpayers filed a reply to the Department’s response.

1
On July 1, 2015, pursuant to enacted Senate Bill 356, the Hearings Bureau became the Administrative Hearings
Office (“AHO”), separate and independent of the Taxation and Revenue Department.

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 2 of 17

12. On November 20, 2015, in accord with the hearing officer’s instructions at the

hearing, the Department filed RPD Form 41071 into the record.

13. On November 24, 2015, the Department filed two Amended Filings containing

RPD Form 41071 in an effort to provide the correct, applicable version of the form. The record

became final and ripe for decision upon receipt of this correct form into the record on November

24, 2015.

14. Taxpayers employed an accountant, Mr. Ron Zerlingo, CPA, to prepare their

income tax returns during the relevant period at issue in this protest.

15. On or about October 13, 2010 (Mr. Kuriyan and Mr. Zerlingo, CPA, dated the

document on October 13th while Mrs. Kuriyan dated the document on October 14th), Taxpayers

submitted their 2009 New Mexico PIT-1 personal income tax return. [Dept. Ex. A, p.2].

16. Taxpayers claimed a refund of $19,757.00 in overpayment of tax on their 2009

PIT-1 return, of which they requested that $4,800.00 be applied to their estimated 2010 personal

income taxes while the remaining $14,957.00 be refunded to them. [Dept. Ex. A, p.2; Taxpayers

Ex. #2, p.2].

17. The Department received Taxpayers’ 2009 PIT-1 return on October 14, 2010.

[Dept. Ex. A, p.1].

18. The Department took no action to either approve or deny the claim for refund of

$14,957.00 by February 11, 2011, which was 120-days after Taxpayers’ October 14, 2010 filing

of the 2009 PIT-1 return containing their claim for refund.

19. Taxpayers did not initiate a civil action in district court or file a protest with the

Department by May 12, 2011, 210-days after the filing of their claim for refund on their 2009

PIT-1 tax return.

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 3 of 17

20. Around April of 2013, Taxpayers realized they had not received their requested

claim for refund of 2009 personal income taxes.

21. Once they realized they had not received their requested refund of 2009 personal

income taxes, Taxpayers contacted their account Mr. Zerlingo to determine what had happened.

[Taxpayers Ex. #1].

22. While it is unclear whether because of Department’s own initiative or because of

Mr. Zerlingo’s prompting, in early 2013 the Department determined that it had never received

Taxpayers’ 2008 personal income tax return and communicated that fact with Taxpayers’

accountant.

23. At the protest hearing, the Department suggested that its failure to take action on

the claim for refund contained in the 2009 PIT-1 return stemmed from the absence of Taxpayers

2008 personal income tax return in the system, which affectively placed Taxpayers account in

Gentax on hold pending full reconciliation of outstanding returns could be completed.

24. On April 17, 2013, Taxpayers resubmitted their 2008 personal income tax return.

[Dept. Ex. A].

25. Between April and November of 2013, Mr. Zerlingo made three to four phone

calls to the Department checking the status on this previous return. Mr. Zerlingo apparently

received verbal confirmation during these phone conversations that all previous returns had been

filed and there were no filing deficiencies in previous returns. Mr. Zerlingo also was never

informed of the need to file an application for refund for the 2009 personal income tax.

[Taxpayers Ex. #1].

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 4 of 17

26. Sometime in December of 2013, Taxpayers received a letter from the Department

containing three Applications for Refund, RPD Forms 41071 (rev. 8/2/2012) to request refunds

in three separate years, including the 2009 personal incomes taxes at issue.

27. Taxpayers completed all three Applications for Refund and mailed them in one

envelope to the Department sometime on or before December 24, 2013. [Taxpayers Ex. #4].

28. Taxpayers received refund checks for two of their Applications for Refund

submitted to the Department contemporaneously with the third claim they submitted for 2009

personal income tax, but did not receive a check for their Application of Refund of the 2009

personal income tax.

29. Taxpayers credibly established through testimony and the fact that the

Department issued refund checks on the other two claims mailed contemporaneously that they

submitted the application for refund of 2009 personal income tax before the December 31, 2013

statute of limitation for a claim for refund for that period had expired.

30. The Department took no action to approve or deny of Taxpayers’ December 2013

application for refund within 120-days, on or before April 23, 2014.

31. Taxpayers did not initiate a civil action in district court or file a protest with the

Department within 210-days, on or before July 22, 2014, of their December 2013 application for

refund of their 2009 personal incomes taxes.

DISCUSSION

At issue in this protest is whether Taxpayers’ claim for refund of 2009 personal income

tax made with the original filing of the return in 2010 and again through application of refund in

December of 2013 may be granted under NMSA 1978, Section 7-1-26 (2013). In a post-hearing

briefing, the parties also made numerous arguments that will also be addressed in more detail.

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 5 of 17
Because no assessment was issued in this case, other than Taxpayers’ initial self-assessment of

tax in filing their 2009 PIT-1 return, no presumption of correctness attaches in this protest. See

NMSA 1978, § 7-1-17 (2007) and Regulation 3.1.6.10 NMAC. Nevertheless, for reasons that

will be discussed in more detail throughout the decision, under the relevant statute and

controlling case law, Taxpayers had the obligation to both timely file their claim for refund and

preserve their claim through resolution

In pertinent part under NMSA 1978, Section 7-1-26 (D) (1) (2013), no refund can be

granted unless as a result of a claim made within three-years of the end of the calendar year in

which the tax was due. At issue in this protest is the payment of 2009 personal income tax.

Under NMSA 1978, Section 7-2-12 (2003), 2009 personal income tax returns were due on April

15, 2010, making December 31, 2013 the end of the calendar year from which the taxes were

due. Therefore, under Section 7-1-26 (D) (1), Taxpayers had until December 31, 2013 to make

any claim for refund to the Department for 2009 personal income taxes.

In this case, Taxpayers in fact made two claims for refund that were filed before that

December 31, 2013 statute of limitations deadline, each of which will be addressed in turn.

Taxpayers’ first claim of refund for the 2009 personal income tax occurred when Taxpayers filed

their 2009 PIT-1 return on October 14, 2010, asking that they be refunded $14,957 in overpaid

tax. The Department took no action on Taxpayers claim for refund, which the Department

explained at hearing was because Taxpayers’ 2008 return had not been received or processed,

placing the 2009 return into a holding status. Taxpayers again filed a claim for refund of 2009

personal income tax when they submitted the application for refund on RPD form 41071 (rev.

8/2/2012) in December of 2013. The Department took no action to either approve or deny the

December 2013 claim for refund.

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 6 of 17
Under Section 7-1-26 (B)(2), when the Department takes no action on a claim for refund

within 120-days from that claim for refund, a taxpayer has 90-days to either file a protest or

commence a civil action in the Santa Fe County District Court. In other words, in the face of

Department inaction, a taxpayer has 210-days from the original filing date of the claim for refund

to preserve their claim by either filing a protest or a civil action. See Unisys Corp. v. N.M.

Taxation & Revenue Dep't, 1994-NMCA-059, 117 NM 609 (Section 7-1-26 gives taxpayers a

method to challenges the Department’s inaction on a claim for refund).

Reading Section 7-1-26 (B) (2) in conjunction with relevant case law establishes that a

taxpayer’s failure to preserve the claim for refund divests the Department of authority to act on

the stale claim. In Kilmer v. Goodwin, 2004-NMCA-122, 136 N.M. 440, the New Mexico Court

of Appeals addressed claims for refund under Section 7-1-26. The facts in Kilmer established

that the Department took no action on the Kilmer taxpayers’ claim for refund within 120-days of

the initial filing of that claim. See id. ¶9, 444. The Kilmer taxpayers failed to preserve their claim

for refund within 90-days of the Department’s inaction by either filing a protest or a civil suit.

See id. ¶15, 445. The expiration of the statute of limitations prevented the Kilmer taxpayers from

refilling a new claim for refund. See id. The New Mexico Court of Appeals noted in Kilmer that

the Legislative purpose of the deadlines under Section 7-1-26 is “to avoid stale claims, which

protects the Department's ability to stabilize and predict, with some degree of certainty, the funds

it collects and manages.” id. ¶16, 446. The Kilmer court further found that the Legislature placed

the responsibility on taxpayers to maintain an active claim and to timely confront the

Department’s inactions on a claim. See id. The Kilmer court ultimately held that the Department

lacked either express statutory authority under Section 7-1-26 or implied authority as an

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 7 of 17
administrative agency to grant those taxpayers’ stale claim for refund beyond the 210-days from

the initial filing of that refund. See id. ¶19-24, 445-446.

Applying Section 7-1-26 (B) and the rationale of Kilmer to the claims for refund at issue

in this protest, both claims became stale due to Taxpayers inaction in preserving the claims and

the Department lacked authority to grant those claims. Under the statutory 210-day deadline

when the Department failed to act on Taxpayers’ first October 14, 2010 claim for refund made

on the PIT-1 within 120-days—February 11, 2011—Taxpayers had 90-days (for a total of 210-

days from the original claim) to either file a protest or a civil action in order to preserve that

claim for refund. Taxpayers took no such action within 210-days. When Taxpayers’ failed to file

a protest or civil action by the 210-day deadline on May 12, 2011, Taxpayers abandoned their

October 14, 2010 claim for refund and the Department was prohibited under Section 7-1-26 (B)

(2), as explained by Kilmer, from either approving or disapproving that claim for refund.

Taxpayers also did not preserve their December 2013 claim for refund. While the

Department seemed reluctant to accept the fact that Taxpayers filed this application in 2013, Dr.

Kuriyan’s testimony on this point was entirely credible, particularly because the Department

processed and received the other two claims for refund Dr. Kuriyan contemporaneously

submitted along with the claim for refund of 2009 personal income taxes. Since Taxpayers filed

the claim before the expiration of the statute of limitations on December 31, 2013, their claim for

refund of 2009 personal income tax was viable under Section 7-1-26. However, when the

Department failed to act on the claim within 120-days, Taxpayers had an obligation to preserve

that claim by filing either a civil action or a protest within 210-days (90-days after the

Department failed to act within 120-days). Although there is evidence that Taxpayers’

accountant may have followed up with the Department over the phone about the refund claim,

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 8 of 17
there is no evidence that Taxpayers filed a civil action or a protest by the July 22, 2014 210-day

deadline, as required to preserve the claim under Section 7-1-26 (B) (2). Because Taxpayers did

not preserve their December 2013 claim for refund in the face of Departmental inaction, the

Department is prohibited from approving that claim for refund. See Kilmer. Since Taxpayers did

not preserve either claim for refund and since the statute of limitations lapsed on December 31,

2013, in the January 13, 2015 denial letter at protest the Department properly denied Taxpayers’

claim for refund as untimely under Section 7-1-26.

Much of Mr. Kuriyan’s frustration in this matter is understandable given that Taxpayers

made two attempts to obtain their refund, and in both instances the Department took no action to

either grant or deny the claim for refund. Nevertheless, some of Mr. Kuriyan’s arguments at

hearing, and particularly after hearing, suggest that Taxpayers believed that because they timely

filed two claims, the Department had the burden to either grant the claims or justify at hearing

why the claims could not be granted. Because of the Department’s lack of communication to

Taxpayers about the steps necessary to preserve the claims and the Department’s own failings in

processing the claims, Mr. Kuriyan believed that Taxpayers were entitled to the claim. However,

under New Mexico's self-reporting tax system, every person is charged with the reasonable duty to

ascertain the possible tax consequences of his or her actions. See Tiffany Construction Co. v.

Bureau of Revenue, 1976-NMCA-127, ¶5, 90 N.M. 16. As case law in New Mexico makes clear,

the Legislature has placed the obligation to preserve a claim for refund on taxpayers. See Kilmer,

¶16. Whether Taxpayers fully understood the deadlines to preserve the claim in the face of

Departmental inaction, it was ultimately Taxpayers responsibility under the statute and case law

to do so.

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 9 of 17
Related to this point, Mr. Zarlengo, CPA, mentioned in his November 16, 2015 email that

in phone calls to the Department, Department employees assured him that all returns had been

filed, did not report any deficiencies in Taxpayers’ filings, and did not tell him of the necessity of

filing an application for refund. Although none of these statements arise to a promise or

suggestion that the Department would approve the specific claim for refund, this evidence in

conjunction with Taxpayers’ argument in closing that it was unfair to punish them when they

submitted multiple claims for refund and the Department’s refund process was disorganized

amounts to a claim for equitable relief.

In Kilmer, the Court of Appeals also considered that taxpayers’ claims for equitable relief

because of numerous alleged errors the Department made in that case. See id. ¶25, 446-447. As

part of its analysis of the issues, the Kilmer Court of Appeals provided a broad outline of

equitable estoppel in the tax context. Generally, courts are reluctant to apply the doctrine of

equitable estoppel against the state. See Kilmer, ¶26, 447 (internal citations omitted). This is

particularly true of cases involving taxation. id. (internal citations omitted). The Kilmer Court of

Appeals noted that estoppel can only apply when “there is a shocking degree of aggravated and

overreaching conduct or where right and justice demand it.” id. (internal citations omitted).

Moreover, like here where the claim for refund does not comply with the requirements of Section

7-1-26, “equitable estoppel cannot lie against the state when the act sought would be contrary to

the requirements expressed by statute.” id. (internal citations omitted).

The Kilmer Court of Appeals found that the Department’s own failings in that case were

mitigated by the fact that the Kilmer taxpayer was represented by an accountant, a “professional,

capable of performing her own research… on New Mexico tax law.” id., ¶41, 700, 450. The

Kilmer Court of Appeals found that estoppel could not apply because of the accountant’s

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 10 of 17
“expertise, the resources available to [the accountant], and the language in Section 7-1-26

addressing the action a taxpayer should take when Department inaction exceeds 120 days…” id.

The telephonic statements of the Department employees to Mr. Zerlingo in this case, which do

not actually promise Taxpayers any relief (usually some sort of promise of a particular result

action/relief is a predicate for reasonable reliance and estoppel), are not grounds to grant

Taxpayers equitable relief. Just like in Kilmer, Taxpayers had an accountant capable of

researching the legal requirements of preserving a refund claim regardless of the alleged lack of

information provided by the Department. Like in Kilmer, because Taxpayers and their

accountant failed to preserve their claims, the Department lacks authority to grant the claim.

After the hearing, Mr. Kuriyan submitted two letters citing numerous concerns about the

admission of some evidence into the record that Mr. Kuriyan argued was not timely disclosed,

due process challenges to the Department’s theory of the case as presented at the hearing, and

complaints about Ms. Friedman’s statements to him about the law on claims for refund and the

potential results if he proceeded with the hearing process. The Department, through Staff

Attorney Ms. Friedman, filed a response to Taxpayers’ letters.

The Administrative Hearings Office is tasked with conducting fair and impartial hearings

to both participants in the proceeding. See NMSA 1978, § 7-1B-6 (D)(2) (2015) (hearing officer

shall allow ample and fair presentation of complaints and defenses). The Administrative

Hearings Office sends out a detailed FAQ sheet with every hearing notice, explaining the hearing

process and the role of the different parties and the Administrative Hearings Office. Under the

Administrative Hearings Office Act, the Department has no authority or supervision over the

separate and independent Administrative Hearings Office’s conduct of tax protest hearings and

rulings, and any implied or express suggestion to the contrary is incorrect. However, in

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 11 of 17
conducting hearings and making its rulings, the Administrative Hearings Office must follow the

requirements of statute and apply controlling legal precedent to the evidence presented by the

parties, making legitimate discussion of the application of controlling legal precedent to the facts

of a protest germane. As should be relatively apparent from this decision (and other decisions

and orders of the Hearings Bureau and the Administrative Hearings Office), the law surrounding

the timeliness of claims for refund is relatively inflexible and places specific obligations on

taxpayers both to timely present their claims and preserve their claims for refund in the face of

inaction. While it is understandable that Mr. Kuriyan may have been frustrated to hear this from

Ms. Friedman in their discussions before the hearing, Ms. Friedman in her written response

generally articulated a good-faith, legal basis consistent with legal precedents in her discussions

with Mr. Kuriyan.

Nevertheless, it is worth reiterating that Department employees have a specific obligation

to treat taxpayers with dignity and respect. See NMSA 1978, § 7-1-4.1 (B) (2003). Under NMSA

1978, Section 7-1-4.2, taxpayers are entitled to courteous assistance, to the right to seek review

(a hearing) under the Tax Administration Act, and to nontechnical explanations of the

procedures, remedies, and rights available at protest and appeal. While an administrative hearing

is an adversarial process between two litigants, which naturally involves some level of

disagreement and self-interest in their discussion of the legal underpinnings of a case, these

provisions make it clear that the Legislature still imposes requirements on the Department to

conduct itself in a professional, fair, and courteous manner throughout the proceeding, including

in preparation for a hearing that a taxpayer is entitled to under the Taxpayer Bill of Rights. The

Administrative Hearings Office fully expects Department employees to behave professionally in

accord with this Legislative mandate at all stages of the hearing proceeding.

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 12 of 17
In the post-hearing letters, Taxpayers moved for exclusion of Department exhibits A, B-

2, and B-3 (Taxpayers PIT-1 returns in 2008, 2010, and 2011) because the Department did not

provide copies to Taxpayers before the scheduled hearing. This issue was already ruled upon on

the record, and Taxpayers do not identify any grounds that would cause the Hearing Officer to

reconsider the admission of these documents. The exhibits in question are Taxpayers own tax

returns in the years surrounding the claimed refund, which the Department used to try to explain

why it failed to act on the 2009 claim for refund. While technically relevant under the applicable

broad standard of that concept, the reason for the Department’s inaction on the 2009 claim for

refund included in Taxpayers’ 2009 PIT-1 is not particularly probative in the specific legal

analysis used to determine whether a taxpayer preserved a claim for refund. Nevertheless, the

documents were admitted over objection because they are documents that Taxpayers prepared

(and presumably possessed copies), the documents were for a limited contextual purpose, and

admission of the documents prepared by Taxpayers was not prejudicial to Taxpayers given their

limited purpose. Moreover, the Department’s objection at hearing to the admission of Taxpayers’

Exhibit #3 not provided to the Department before the hearing was equally unpersuasive. In other

words, both sides presented documents into the record that had not previously been provided to

the opposing party. These non-disclosed documents provided by both parties were admitted over

objection because neither could articulate any actual, material prejudice for the breach.

Taxpayers’ due process complaints focus on allegations that the Department allegedly

changed its factual theory of the case from the time of the scheduling conference until the merits

hearings, thereby surprising Taxpayers and preventing Taxpayers from subpoenaing an envelope

showing that the December 2013 claim for refund was timely made2. The triggering documents

2
The hearing officer has already found that Taxpayers made the December 2013 claim for refund timely even
without the envelope, so the absence of the envelope was not prejudicial to Taxpayer’s case. Although there were

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 13 of 17
in this protest are the Department’s denial of claim for refund under letter id. no. L1600681936,

and Taxpayers’ protest of that denial. In the Department’s denial of protest letter, the Department

indicated that Taxpayers refund claim was untimely under Section 7-1-26. Taxpayers filed a

protest citing the specific reasons why it disagreed with that timeliness determination. The

grounds cited in that protest letter became the grounds of the hearing protest proceeding, unless

amended before the hearing. See NMSA 1978, § 7-1-24 (B). At the scheduling conference, both

sides in the proceeding were asked to address the issues at protest. The purpose of summarizing

the issues at protest is both so that the assigned hearing officer can gauge the potential length of

the discovery process, the potential length of hearing, and to encourage the basic communication

between parties that is necessary to have an efficient and productive hearing process. While this

discussion of issues during the scheduling conference is certainly pertinent to how the hearing

proceeds, it is not generally a substitute for the original Department’s action/inactions and a

taxpayer’s protest to that action, which controls the grounds of the proceeding under Section 7-1-

24 (B). In this case, Taxpayer was notified by the Department that the basis of the denial of claim

for refund was untimeliness under Section 7-1-26. The Department’s discussion of the 2008,

2010, and 2011 returns in the context of providing explanation as to why the 2009 return and

claim for refund was not processed does not alter the basis legal analysis under Section 7-1-26

whether Taxpayers’ claims for refund could be granted under the relevant statutory deadlines.

The essence of due process is that the person has notice, and an opportunity to be heard. See

Albuquerque Bernalillo County Water Util. Auth. v. N.M. Pub. Regulation Comm'n, 2010-

NMSC-013, ¶28, 148 N.M. 21 (in administrative law, due process generally means “notice of the

opposing party’s claims and a reasonable opportunity to meet them.”). Taxpayers had a hearing

some disputed facts in this matter, this matter turns on the legal analysis rather than any disputed fact. Even under
Taxpayers view of the facts, the legal analysis discussed above does not allow for granting a claim for refund that
Taxpayers did not preserve.

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 14 of 17
that focused on timeliness of and entitlement to their refund claim under Section 7-1-26, which

was the stated basis of the Department’s denial of the claim for refund in its denial letter that

Taxpayers protested, satisfying due process requirements.

CONCLUSIONS OF LAW

A. Taxpayers filed a timely, written protest to the Department’s inaction on their claim

for refund, and jurisdiction lies over the parties and the subject matter of this protest.

B. Holding the July 7, 2015 Scheduling Hearing satisfied the 90-day hearing

requirement of NMSA 1978, Section 7-1B-8 (2015).

C. Taxpayers had notice and an opportunity to be heard on the Department’s denial of

claim for refund as untimely under Section 7-1-26.

D. Taxpayers failed to either protest or file a civil action challenging the Department’s

inaction on their October 14, 2010 claim for refund filed with their 2009 PIT-1 within 210-days as

required under NMSA 1978, Section 7-1-26 (B), rendering that claim stale. The Department lacks

either express or inherent authority to grant Taxpayers’ stale claim for refund. See Kilmer v.

Goodwin, 2004-NMCA-122, 136 N.M. 440.

E. Taxpayers timely filed another claim for refund in December of 2013 before

expiration of the statute of limitations on a claim for refund of 2009 personal incomes taxes.

F. Taxpayers failed to either protest or file a civil action challenging the Department’s

inaction on their December 2013 claim for refund within 210-days as required under NMSA 1978,

Section 7-1-26 (B), rendering that claim stale. The Department lacks either express or inherent

authority to grant Taxpayers’ stale claim for refund. See Kilmer v. Goodwin, 2004-NMCA-122,

136 N.M. 440.

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 15 of 17
For the foregoing reasons, the Taxpayers’ protest IS DENIED.

DATED: December 17, 2015.

Brian VanDenzen
Interim Chief Hearing Officer
Administrative Hearings Office
P.O. Box 6400
Santa Fe, NM 87502

NOTICE OF RIGHT TO APPEAL

Pursuant to NMSA 1978, Section 7-1-25 (1989), the parties have the right to appeal this

decision by filing a notice of appeal with the New Mexico Court of Appeals within 30 days of the

date shown above. See Rule 12-601 NMRA. If an appeal is not filed within 30 days, this

Decision and Order will become final. Either party filing an appeal shall file a courtesy copy of

the appeal with the Administrative Hearings Office contemporaneous with the Court of Appeals

filing so that the Administrative Hearings Office may being preparing the record proper.

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 16 of 17
CERTIFICATE OF SERVICE

On December 17, 2015, a copy of the foregoing Decision and Order was submitted to the

parties listed below in the following manner:

First Class Mail Interoffice Mail

Jacob & Jeanne Kuriyan Cordelia Friedman
186 Mariquita Road Taxation and Revenue Department
Corrales, NM 87048-8293 1100 S. St. Francis
Santa Fe, NM 87504
Ron Zarlengo
Zarlengo & Co.
7100 W. 44th Ave., Suite 101
Wheat Ridge, CO 80033

John D. Griego
Legal Assistant
Administrative Hearings Office
P.O. Box 6400
Santa Fe, NM 87502

In the Matter of the Protest of Jacob & Jeanne Kuriyan, page 17 of 17