Could the Greigs recover a $1,610 income-tax overpayment when their timely 2010 refund claims went unanswered but they waited until 2015 to act again?

Plain-English summary

David and Kristine Greig lost a $1,610 personal income tax refund even though their original claims were timely, because they did not pursue the Department's inaction within the statutory deadlines. A later 2015 claim could not revive the expired refund period.

For 2008, the Greigs paid $1,610 of estimated tax and filed their return in October 2009. The return omitted that estimated payment but claimed a separate $224 refund, which the Department paid.

In December 2009, the Department itself told the Greigs that the additional $1,610 overpayment existed and enclosed a refund application. They filed that application in January 2010 and an amended return seeking the same refund in October 2010. Both were within the three-year limitation period.

Department silence triggered a separate action deadline

The Department did not grant or deny either 2010 claim within 120 days. Section 7-1-26 then allowed the Greigs to file an administrative protest or district-court action within 90 days after that 120th day—210 days from the claim.

They did not use either remedy. That failure meant they did not perfect a challenge to the Department's inaction on the timely original claims.

Refiling remained possible only while the refund period was open

The Greigs could also refile, but only before the general refund limitation expired on December 31, 2012. They did not contact the Department again until 2015.

A Department employee saw that the money remained and advised another filing. The October 8, 2015 claim nevertheless arrived after the statutory refile deadline, and the AHO found the Department legally prohibited from granting it.

The decision recognized the Greigs' fairness argument—that the overpayment was their money—but applied the absolute limitation rule intended to prevent stale claims and require taxpayers to track unresolved refunds.

Unclaimed-property treatment was left open

The Greigs asked whether they could obtain the money as unclaimed property. The AHO explained that the Uniform Unclaimed Property Act was a separate statute with different requirements and deadlines. Because the protest involved only a Tax Administration Act refund claim, it rendered no opinion on that alternative.

Result: protest DENIED. The $1,610 refund claim was barred under Section 7-1-26.

What this means for you

Taxpayers with unanswered refund claims

Silence is not an indefinite extension. Calendar the 120th day after filing and the following 90-day window for an administrative protest or lawsuit.

Taxpayers considering refiling

Confirm the general refund limitation remains open. A Department employee's later suggestion to submit another claim does not override the statute.

Taxpayers with possible unclaimed property

Treat unclaimed-property law as a distinct route with its own elements and deadlines. This decision expressly did not decide whether it applied.

Common questions

Q: Were the original refund claims timely?
A: Yes. The January and October 2010 claims were filed within the refund limitation period.

Q: What happened after the Department failed to respond for 120 days?
A: The Greigs had 90 days to protest or sue, but did not do so.

Q: Could they simply refile at any time?
A: No. Refiling was available only while the general limitation period remained open.

Q: What was the last refile date identified by the AHO?
A: December 31, 2012.

Q: Did the AHO reject an unclaimed-property claim?
A: No. It expressly gave no opinion because that issue arose under a separate statute and was outside this protest.

Citations and references

Statutes:

• NMSA 1978, § 7-1-26 — refund filing period, 120-day inaction rule, 90-day remedy window, and refiling
• NMSA 1978, § 7-8A-1 et seq. — separate Uniform Unclaimed Property Act mentioned but not decided

Case cited:

• Kilmer v. Goodwin, 2004-NMCA-122 — absolute refund limitation, stale claims, and taxpayer duty to pursue Department inaction

Source

• Listing: New Mexico Decisions & Orders
• Decision post: David and Kristine Greig
• Decision PDF: D&O 16-07

Original ruling text

STATE OF NEW MEXICO
ADMINISTRATIVE HEARINGS OFFICE
TAX ADMINISTRATION ACT

IN THE MATTER OF THE PROTEST OF
DAVID AND KRISTINE GREIG, No. 16-07
TO THE DENIAL OF REFUND ISSUED UNDER
LETTER ID NO. L2057050160

DECISION AND ORDER

A formal hearing on the above-referenced protest was held on February 18, 2016 before

Hearing Officer Dee Dee Hoxie. The Taxation and Revenue Department (Department) was

represented by Ms. Melinda Wolinsky, Staff Attorney. Ms. Sonya Varela, Auditor, also appeared

on behalf of the Department. Mr. David Greig and Ms. Kristine Greig (Taxpayers) appeared for

the hearing and represented themselves. The Hearing Officer took notice of all documents in the

administrative file. Based on the evidence and arguments presented, IT IS DECIDED AND

ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. On October 15, 2015, the Department denied the Taxpayers’ request for refund regarding

an overpayment of personal income tax (PIT) in 2008.

2. On November 16, 2015, the Taxpayers filed a formal protest letter.

3. On December 29, 2015, the Department filed a Request for Hearing asking that the

Taxpayers’ protest be scheduled for a formal administrative hearing.

4. On December 31, 2015, the Hearings Office issued a notice of hearing. The hearing date

was set within ninety days of the receipt of the protest.

5. The Taxpayers requested a continuance of the hearing, which was granted.

6. An Amended Notice of Hearing was sent to the parties on January 12, 2016.

7. For the 2008 tax year, the Taxpayers were granted an extension of time to file their PIT

return. The Taxpayers made an estimated tax payment of $1,610.00 in April 2009 and

filed their return in October 2009.

8. On their return, the Taxpayers claimed a refund of $224.00, which was granted and paid

to them.

9. The Taxpayers’ return failed to account for their estimated tax payment, which they were

also entitled to claim for refund.

10. On December 23, 2009, the Department issued a letter to the Taxpayers and advised that

there was an overpayment of PIT for the 2008 tax year in the amount of $1,610.00, which

was the amount of their estimated payment.

11. Enclosed with the letter was an application for refund.

12. The Taxpayers filed the application for refund with the Department on or about January

25, 2010.

13. The Taxpayers consulted with an accountant, who recommended that they also file an

amended PIT return for 2008. The Taxpayers filed the amended return requesting a

refund with the Department on or about October 17, 2010.

14. Both of these requests occurred within the statute of limitations as they both occurred

within three years of the year when the tax was due.

15. The Department took no action on either of the Taxpayers claims for refund.

16. In 2015, the Taxpayers contacted the Department and inquired about the status of their

refund claim.

17. The Department employee at the office saw that the money was still there and advised the

Taxpayers to file another claim for refund.

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Letter ID No. L2057050160
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18. On October 8, 2015, the Taxpayers filed another claim for refund for the 2008 tax year.

19. The Department denied the claim based on the statute of limitations.

DISCUSSION

The issue to be decided is whether the Taxpayers’ claim for refund is barred by the

statute of limitations.

Statute of Limitations for Filing a Claim.

All claims for refund must be filed within three years of the end of the calendar year in

which the payment was originally due. See NMSA 1978, § 7-1-26 (D). The Taxpayers’ PIT for

2008 was due on April 15, 2009. Therefore, the final date on which to file a claim for refund

would have been December 31, 2012. The Taxpayer filed two timely claims for refund in 2010.

However, the claims were neither granted nor denied within 120 days from the date of the

claims.

Remedies for Inaction by the Department.

When a claim for refund is neither granted nor denied within 120 days of the date the

claim was filed, taxpayers have the option of refiling the claim or of pursuing a legal or

administrative remedy within 90 days of the 120th day, that is within 210 days of the date of the

claim. See NMSA 1978, § 7-1-26 (B).

The Taxpayers refiled their claim on October 8, 2015. However, taxpayers may only

refile the claim if there is still time to do so under the statute of limitations. See NMSA 1978, §

7-1-26 (B) and (D). The Taxpayers’ refiled claim was not timely.

Taxpayers may opt to file an administrative protest or a lawsuit in district court, and those

actions must be filed within 210 days of the date that the claim was filed. See NMSA 1978, § 7-

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Letter ID No. L2057050160
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1-26 (B) and (C). The Taxpayers failed to perfect their right to appeal the inaction by the

Department within 210 days from the filing of the claims.

The Taxpayers argued that it is fundamentally unfair for the Department to keep the

funds that they overpaid in 2008. The Taxpayers argued that the $1,610.00 is legally theirs and

that the Department should not be able to keep it. The statute absolutely bars the Department

from acting on a claim for refund that is beyond the statute of limitations even when the claim

was originally filed within the statute of limitations. See In re Kilmer, 2004-NMCA-122, 136

N.M. 440. The statute of limitations prevents stale claims and effectively places the onus on

taxpayers to pursue their claim in a timely manner because the taxpayers are the one who can

more easily keep track of their claims for refund. See Kilmer, 2004-NMCA-122, ¶ 16.

The claims for refund were filed in 2010. The Department neither granted nor denied

the refund within 120 days from the dates of the claims. The Taxpayer neither filed a protest nor

an action in district court within 210 days from the dates of the claims. Therefore, the Taxpayer

failed to perfect its right to appeal the inaction of the Department on the original claim.

Consequently, the Department is statutorily prohibited from acting on the claim. See NMSA

1978, § 7-1-26 (B). See also Kilmer, 2004-NMCA-122. The Taxpayers refiled their claim on

October 8, 2015. However, the deadline to refile the claim was December 31, 2012. Therefore,

the Department is statutorily prohibited from granting the claim. See NMSA 1978, § 7-1-26 (D).

Unclaimed Property.

The Taxpayers asked if they could still obtain their money from the Department as

unclaimed property. The Department did not know the answer to that question. The Department

is responsible for unclaimed property under an entirely different statute. See NMSA 1978, § 7-

8A-1 et seq. The Taxpayers claims for refund were made under the Tax Administration Act.

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Letter ID No. L2057050160
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See NMSA 1978, § 7-1-1 et seq. These are separate statutory sections with separate

requirements and deadlines. As the Taxpayers’ claim, by means of applications for refund and

an amended return, was under the Tax Administration Act, the Taxpayers’ claim is barred by the

statute of limitations. See NMSA 1978, § 7-1-26. The issues of the protest did not include any

claim under the Uniform Unclaimed Property Act, and no opinion is rendered on that issue.

CONCLUSIONS OF LAW

A. The Taxpayers filed a timely written protest to the denial of refund issued under

Letter ID number L2057050160, and jurisdiction lies over the parties and the subject matter of this

protest.

B. The Taxpayers failed to take appropriate action when the Department failed to deny

or to grant their refund in 2010. See NMSA 1978, § 7-1-26.

C. The Taxpayers failed to refile their claim for refund by December 31, 2012;

therefore, the claim for refund was barred by the statute of limitations. See id.

For the foregoing reasons, the Taxpayers' protest is DENIED.

DATED: March 7, 2016.

Dee Dee Hoxie
DEE DEE HOXIE
Hearing Officer
Administrative Hearings Office
Post Office Box 6400
Santa Fe, NM 87502

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