Could Chamisa Hills Family Dental avoid penalties and interest because a retained office manager failed to open notices, file returns, and make correct tax payments?

Plain-English summary

Chamisa Hills Family Dental remained liable for penalties and interest after its office manager failed to timely file gross receipts and withholding tax returns and underpaid three periods. The practice had delegated tax filings, payments, mail, and electronic notices to the manager without sufficient training, expertise verification, or internal controls.

Dr. John Candelaria purchased the dental practice in May 2016 and retained the previous owner's highly recommended office manager.

The manager handled daily operations, including gross receipts and withholding tax reporting and payment. Chamisa Hills also used a CPA, but the CPA only compiled CRS-1 information; the manager remained solely responsible for filing the returns and sending payments.

Multiple notices and filings were missed

The Department sent nonfiler notices dated June 9, September 15, and September 24, 2016 and May 18, 2017. Each was mailed and also available through the Taxpayer Access Point.

The manager controlled the practice's physical mail and electronic tax correspondence. When she resigned in May 2017 after performance concerns, Chamisa Hills found unopened mail and other business problems.

All relevant CRS returns were eventually filed on July 27, 2017, after their due dates.

The practice also underpaid tax principal by:

• $33.66 for the quarter ending June 30, 2016;
• $897.61 for the quarter ending September 30, 2016; and
• $3,149.19 for the quarter ending December 31, 2016.

Some partial payments had been made before their due dates, but without returns the Department could not apply them to the correct periods and held them in suspense.

Chamisa Hills did not dispute the gross receipts and withholding tax principal. It sought abatement only of penalty and interest.

Interest was mandatory

Section 7-1-67 required interest from the day after tax became due until the principal was paid. The Department had no discretion to abate interest based on the reason for late or incomplete payment.

The early partial payments did not eliminate interest because they could not be properly credited without returns and did not fully satisfy the tax due.

Delegating everything to the manager was negligent

The practice did not require the manager to complete New Mexico tax training. The record did not establish that she had tax-accounting expertise or was a competent accountant.

Chamisa Hills also lacked precautions or internal controls that would have exposed the missing returns, ignored notices, unpaid bills, and incorrect payments.

The AHO found negligence under all three regulatory definitions: failure to use ordinary business care, inaction where action was required, and inadvertence or inattention.

Reliance on an agent did not support abatement

Regulation 3.1.11.11(D) NMAC allowed nonnegligence when a taxpayer reasonably relied on competent tax counsel or an accountant after full disclosure of relevant facts.

Chamisa Hills did not show that the underpayments resulted from advice by its CPA or the manager. The CPA was not responsible for filing or paying, and the manager was not shown to be a competent tax accountant.

The same regulation also said that reliance on an agent does not excuse a late return. Every return in the protest was late.

The AHO found no intent to evade tax and no bad faith, but negligence penalty did not require bad intent.

Result: protest DENIED. As of December 20, 2017, the estimated remaining liability was $3,558.88, subject to a pending account credit. The Department was ordered to provide an updated summary of outstanding penalty and interest.

What this means for you

Businesses delegating tax compliance to one employee

Keep independent access to tax portals and mail, require regular filing confirmations, reconcile payments to returns, and use supervisory review. A single trusted employee should not be the only control.

Buyers retaining a seller's staff

Verify the tax knowledge and procedures of inherited employees. A strong recommendation does not establish competence in state tax filing.

Businesses using an outside CPA for limited work

Define responsibility clearly. If the CPA only compiles information, the business still owns filing, payment, notice monitoring, and follow-up.

Taxpayers making partial payments

File the corresponding return so the Department can apply the payment. Funds may remain in suspense without the reporting information needed to credit them.

Common questions

Q: Did Chamisa Hills dispute the underlying tax principal?
A: No. The protest addressed only penalty and interest.

Q: How many Department nonfiler notices were sent?
A: Four, by mail and through the Taxpayer Access Point.

Q: Were the returns eventually filed?
A: Yes, but all were filed late on July 27, 2017.

Q: Why did early partial payments not solve the problem?
A: Without returns, the Department held the funds in suspense, and the amounts were also less than the full tax due.

Q: Did reliance on the office manager excuse the late filings?
A: No. Her tax competence was not established, the practice lacked controls, and reliance on an agent does not excuse a late return.

Q: Was the practice accused of intentionally evading tax?
A: No. The AHO found no bad intent, but still found civil negligence.

Q: What balance remained at the hearing?
A: An estimated $3,558.88, expected to change after a pending account credit was applied.

Citations and references

Statutes and regulations:

• NMSA 1978, §§ 7-1-3(X) and 7-1-17(C) — tax definition and assessment presumption
• NMSA 1978, § 7-1-67 — mandatory interest
• NMSA 1978, § 7-1-69(A) and (B) — civil negligence penalty and mistake-of-law exception
• Regulations 3.1.11.10 and 3.1.11.11(D) NMAC — negligence and reliance on competent tax counsel or accountant

Cases cited:

• Tiffany Construction Co. v. Bureau of Revenue, 1976-NMCA-127 — duty to ascertain tax consequences
• El Centro Villa Nursing Center v. Taxation and Revenue Department, 1989-NMCA-070 — taxpayer cannot abdicate responsibility by appointing an accountant
• Marbob Energy Corp. v. New Mexico Oil Conservation Commission, 2009-NMSC-013 — mandatory effect of statutory “shall”

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Chamisa Hills Family Dental
• Decision PDF: D&O 18-04

Original ruling text

STATE OF NEW MEXICO
ADMINISTRATIVE HEARINGS OFFICE
TAX ADMINISTRATION ACT

IN THE MATTER OF THE PROTEST OF
CHAMISA HILLS FAMILY DENTAL
TO ASSESSMENTS
ISSUED UNDER LETTERS
ID NOs. L1561627952, L1024757040, L2098498864 and L0051678512

v. D&O No. 18-04

NEW MEXICO TAXATION AND REVENUE DEPARTMENT

DECISION AND ORDER

A protest hearing occurred in the above-captioned protest on December 20, 2017 at 2:00

p.m. before Chris Romero, Esq., Hearing Officer, in Santa Fe, New Mexico. Ms. Valerie

Borrego, C.P.A., appeared representing Chamisa Hills Family Dental (“Taxpayer”). Ms. Sandra

Candelaria appeared as a witness for Taxpayer. Staff Attorney, Ms. Cordelia Friedman, Esq.,

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

(“Department”). Protest Auditor, Ms. Veronica Galewaler, appeared as a witness for the

Department. Taxpayer Exhibits 1-0-2, 1-1 to 1-21, 2-1 to 2-3, 3-1 to 3-3, 4, and Department

Exhibits A to C and E to I were admitted into the evidentiary record, and are described in the

Administrative Exhibit Log. Taxpayer Exhibits 1-0-1, 5, 6-2 to 6-5, and 7 were not admitted into

the evidentiary record, but were accepted as part of the record of the hearing.

With specific regard for Taxpayer Exhibit 7, the parties stipulated that the record of the

hearing and the evidentiary record would remain open for Taxpayer’s submission of an audio

recording. The audio recording was received by the Administrative Hearings Office on

December 27, 2017 at which time the record closed. The recording was identified as Taxpayer
Exhibit 7. The Hearing Officer reviewed Taxpayer Exhibit 7 in its entirety and found that it was

not relevant to the issues at hand and excluded it from the evidentiary record.

Based on the evidence and arguments presented, IT IS DECIDED AND ORDERED AS

FOLLOWS:

FINDINGS OF FACT

1. On August 17, 2017, the Department assessed Taxpayer the amounts of $209.99

in gross receipts tax penalty, $0.07 in gross receipts tax interest, $92.80 in withholding tax

penalty, and $0.03 in withholding tax interest for a total assessment and amount due of $302.89

under Letter ID No. L1561627952 for the reporting period ending March 31, 2016.

2. On August 17, 2017, the Department assessed Taxpayer the amounts of $19.12 in

gross receipts tax, $642.47 in gross receipts tax penalty, $0.80 in gross receipts tax interest,

$14.54 in withholding tax, $488.75 in withholding tax penalty, and $0.61 in withholding tax

interest for a total assessment and amount due of $1,166.29 under Letter ID No. L1024757040

for the reporting period ending June 30, 2016.

3. On August 17, 2017, the Department assessed Taxpayer the amounts of $589.60

in gross receipts tax, $628.00 in gross receipts tax penalty, $18.70 in gross receipts tax interest,

$308.01 in withholding tax, $328.09 in withholding tax penalty, and $9.72 in withholding tax

interest for a total assessment and amount due of $1,882.17 under Letter ID No. L2098498864

for the reporting period ending September 30, 2016.

4. On August 17, 2017, the Department assessed Taxpayer the amounts of $1,560.25

in gross receipts tax, $574.00 in gross receipts tax penalty, $33.85 in gross receipts tax interest,

$1,588.94 in withholding tax, $584.57 in withholding tax penalty, and $34.46 in withholding tax

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 2 of 15
interest for a total assessment and amount due of $4,376.07 under Letter ID No. L0051678512

for the reporting period ending December 31, 2016.

5. On August 23, 2017, Taxpayer, by and through Ms. Borrego, C.P.A., executed a

Formal Protest of the assessments which was received in the Department’s Protest Office on

August 28, 2017.

6. The Department acknowledged Taxpayer’s Formal Protest on September 18, 2017

under Letter ID No. L2087402800.

7. On October 25, 2017, the Department filed a Hearing Request with the

Administrative Hearings Office.

8. The Administrative Hearings Office entered and served a Notice of

Administrative Hearing on October 26, 2017 setting a hearing on the merits of Taxpayer’s

protest for November 14, 2017.

9. Taxpayer failed to appear for the properly noticed hearing on November 14, 2017.

The Administrative Hearings Office entered a Decision and Order which denied Taxpayer’s

protest for that reason.

10. The hearing of November 14, 2017, for which Taxpayer did not appear either in

person or through an authorized representative, was held within 90 days of Taxpayer’s protest.

11. On November 20, 2017, Taxpayer, by and through Ms. Borrego, requested that

the Decision and Order denying Taxpayer’s protest for its failure to appear be set aside. The

Department did not oppose the request.

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 3 of 15

12. On November 29, 2017, the Administrative Hearings Office entered and served

its Order Setting Aside Decision and Order and Notice of Administrative Hearing. A hearing on

the merits of Taxpayer’s protest was scheduled to occur on December 20, 2017.

13. In or about May of 2016, Dr. John Candelaria purchased a dental practice from

Dr. Frank Montoya. [Testimony of Ms. Candelaria].

14. The practice is known as Chamisa Hills Family Dental. [Testimony of Ms.

Candelaria].

15. Dr. Candelaria and Ms. Candelaria are married. [Testimony of Ms. Candelaria].

16. The office manager 1 (hereinafter “Manager”) under the previous owner was

highly regarded and recommended to Taxpayer, which continued to employ her in the same

capacity. [Testimony of Ms. Candelaria].

17. Manager was responsible for Taxpayer’s daily business operations, which among

other tasks, included reporting and paying withholding and gross receipts taxes. [Testimony of

Ms. Candelaria].

18. Taxpayer did not require Manager to complete any training or instructional

programs in reference to New Mexico tax reporting or payment requirements during her

employment. [Testimony of Ms. Candelaria].

19. Taxpayer also utilized the services of a certified public accountant whose

functions were limited to compiling CRS-1 information that Manager would then reference in

order to complete CRS-1 reports and payments to the Department. [Testimony of Ms.

Candelaria; Taxpayer Ex. 2].

1
Taxpayer identified its office manager by name on the record of this proceeding. It is unnecessary, however, for
the purpose of this Decision and Order, to identify or otherwise refer to Manager by name.

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 4 of 15

20. Taxpayer’s certified public accountant was not responsible for making CRS-1

reports or accompanying payments on behalf of Taxpayer. Those tasks were delegated solely to

Manager. [Testimony of Ms. Candelaria].

21. In or about May of 2017, Taxpayer identified various concerns in Manager’s job

performance. Ms. Candelaria alleged that Manager was not performing her employment

responsibilities, and upon being confronted, Manager resigned. [Testimony of Ms. Candelaria].

22. After Manager resigned, Ms. Candelaria assumed office management functions

for Taxpayer. [Testimony of Ms. Candelaria].

23. Taxpayer identified various deficiencies in Manager’s job performance. Among

the various deficiencies alleged were thousands of dollars in unpaid and delinquent bills owed by

Taxpayer, failure to distribute statements for collecting payments for services rendered,

discrepancies in time sheets for hours worked and leave taken, and failure to timely report and

pay withholding and gross receipts taxes. [Testimony of Ms. Candelaria].

24. Taxpayer denied having notice of any issues in reference to its CRS reporting or

payments until it received the Non-Filer Reminder dated May 18, 2017 under Letter ID No.

L0125900080. [Testimony of Ms. Candelaria; Taxpayer Ex. 6-1; Dept. Ex. H].

25. The Non-Filer Reminder on May 18, 2017 represented the fourth notice the

Department sent to Taxpayer. Each notice was sent by U.S. Mail and were also available through

the Taxpayer Access Point (hereinafter “TAP”). The Non-Filer notices were dated June 9, 2016,

September 15, 2016, September 24, 2016, and May 18, 2017. [Testimony of Ms. Galewaler,

Dept. Exs. E; F; G; H; Taxpayer Ex. 6-1].

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 5 of 15

26. At or near the time Manager resigned, Taxpayer discovered numerous pieces of

unopened mail. Manager had been solely responsible for handling Taxpayer’s mail. [Testimony

of Ms. Candelaria].

27. In addition to the notices provided by U.S. Mail, Taxpayer also received

electronic notice through the TAP. Taxpayer should have observed an alert which would have

directed it to the correspondence which was available in electronic form. [Testimony of Ms.

Galewaler; Dept. Ex. C].

28. Any electronic correspondence in reference to Taxpayer’s New Mexico tax

reporting would have also been routed to Manager. [Testimony of Ms. Candelaria].

29. Taxpayer’s CRS returns were untimely for all relevant reporting periods. All

returns were submitted on July 27, 2017 and after the dates they were originally due. [Testimony

of Ms. Galewaler; Dept. Ex. A].

30. Payments applied to the periods ending June 30, 2016, September 30, 2016, and

December 31, 2016 were less than what was due for each period causing Taxpayer to incur

penalties and interest. [Testimony of Ms. Galewaler; Dept. Ex. A; Taxpayer Ex. 1].

31. Taxpayer’s payments for the period ending June 30, 2016 totaled $5,622.46. The

amount of tax principal due for the same period was $5,656.12. The difference represented an

underpayment in the total amount of $33.66 that correlated with the total amount of tax assessed

under Letter ID No. L1024757040. [Testimony of Ms. Galewaler; Taxpayer Ex. 1-1 to 1-3; Dept.

Ex. A-2].

32. Taxpayer’s payments for the period ending September 30, 2016 totaled $3,883.10.

The amount of tax principal due for the same period was $4,780.21. The difference represented

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 6 of 15
an underpayment in the total amount of $897.61 that correlated with the total amount of tax

assessed under Letter ID No. L2098498864. [Testimony of Ms. Galewaler; Taxpayer Ex. 1-1; 1-

5 to 1-7; Dept. Ex. A-3].

33. Taxpayer’s payments for the period ending December 31, 2016 totaled $5,126.16.

The amount of tax principal due for the same period was $8,275.35. The difference represented

an underpayment in the total amount of $3,149.19 that correlated with the total amount of tax

assessed under Letter ID No. L0051678512. [Testimony of Ms. Galewaler; Taxpayer Ex. 1-1; 1-

8 to 1-10; Dept. Ex. A-4].

34. In circumstances where Taxpayer made partial payment before the date it was

due, the Department was unable to credit the payment appropriately because it was not

accompanied by a proper tax return. Instead, the payment was held in suspense pending the

return necessary to enable complete processing. [Testimony of Ms. Galewaler; Taxpayer Ex. B].

35. As of December 20, 2017, Taxpayer’s liability under the assessments was

$3,558.88, although the sum due was expected to change depending on a credit balance that was

pending on Taxpayer’s account as of the date of the hearing. [Testimony of Ms. Galewaler; Dept.

Ex. I].

36. Although Manager was highly recommended to Taxpayer, there was no evidence

to establish that Manager had any expertise in tax accounting or was otherwise a competent tax

accountant. [Testimony of Ms. Candelaria].

DISCUSSION

Taxpayer did not protest the gross receipts and withholding tax principal due under the

assessments. Rather, Taxpayer’s protest is directed at the imposition of associated penalty and

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 7 of 15
interest. Under NMSA 1978, Section 7-1-17 (C) (2007), the assessments issued in this case are

presumed correct. Taxpayer has the burden to overcome the assessments. See Archuleta v.

O’Cheskey, 1972-NMCA-165, ¶11, 84 N.M. 428. Unless otherwise specified, for the purposes of

the Tax Administration Act, “tax” is defined to include interest and civil penalty. See NMSA 1978,

Section 7-1-3 (X) (2013). Under Regulation 3.1.6.13 NMAC, the presumption of correctness

under Section 7-1-17 (C) extends to the Department’s assessment of penalty and interest. See

Chevron U.S.A., Inc. v. State ex rel. Dep’t of Taxation & Revenue, 2006-NMCA-50, ¶16, 139 N.M.

498, 503 (agency regulations interpreting a statute are presumed proper and are to be given

substantial weight).

Interest

When a taxpayer fails to make timely or correct payment of taxes due to the state,

“interest shall be paid to the state on that amount from the first day following the day on which the

tax becomes due...until it is paid.” NMSA 1978, Section 7-1-67 (2007) (italics for emphasis).

Under the statute, regardless of the reason for non-payment of the tax, the Department has no

discretion in the imposition of interest, as the statutory use of the word “shall” makes the

imposition of interest mandatory. See Marbob Energy Corp. v. N.M. Oil Conservation Comm’n,

2009-NMSC-013, ¶22, 146 N.M. 24, 32 (use of the word “shall” in a statute indicates the provision

is mandatory absent clear indication to the contrary). The language of the statute also makes it clear

that interest begins to run from the original due date of the tax and continues until the tax principal

is paid in full. The Department has no discretion under Section 7-1-67 and must assess interest

against Taxpayer from the time the tax was due but not paid until the tax principal liability is

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 8 of 15
satisfied. Therefore, the assessment of interest is mandatory and the Department is without legal

authority to abate it.

Taxpayer asserted that it had made timely partial payments despite the fact that the

payments had not been accompanied by associated tax returns. However, the evidence established

that even if partial payments were made in advance of the applicable due dates, the Department was

unable to credit the funds appropriately unless Taxpayer also filed an associated return. Instead, the

payments were held in suspense until Taxpayer filed its returns on July 27, 2017.

The evidence also established that those payments did not completely satisfy the amount of

tax due. Ms. Galewaler credibly testified that in addition to Taxpayer’s failure to file timely reports,

Taxpayer also underpaid its tax obligation for each of the reporting periods subject of the protest.

[See Taxpayer Ex. 1-1; Dept. Ex. A]. Assessment of interest is mandatory.

Penalty

When a taxpayer fails to pay taxes due to the State because of negligence or disregard of

rules and regulations, but without intent to evade or defeat a tax, NMSA 1978 Section 7-1-69

(2007) requires that

there shall be added to the amount assessed a penalty in an amount equal
to the greater of: (1) two percent per month or any fraction of a month
from the date the tax was due multiplied by the amount of tax due but not
paid, not to exceed twenty percent of the tax due but not paid.

(italics added for emphasis).

As discussed above, the statute’s use of the word “shall” makes the imposition of penalty

mandatory in all instances where a taxpayer’s actions or inactions meet the legal definition of

“negligence” even if, like here, Taxpayers actions or inactions were unintentional.

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 9 of 15
Regulation 3.1.11.10 NMAC defines negligence in three separate ways: (A) “failure to

exercise that degree of ordinary business care and prudence which reasonable taxpayers would

exercise under like circumstances;” (B) “inaction by taxpayer where action is required”; or (C)

“inadvertence, indifference, thoughtlessness, carelessness, erroneous belief or inattention.” In this

case, Taxpayer was negligent under Regulation 3.1.11.10 (A), (B) & (C) NMAC because it failed to

exercise reasonable precautions or utilize appropriate internal controls that could have enabled it to

perceive irregularities with its tax reporting and payments. Understandably, Taxpayer expressed

regret for placing so much confidence in Manager. Unfortunately, its omissions demonstrate an

inadvertence, indifference, thoughtlessness, carelessness, erroneous belief or inattention resulting in

a failure to exercise that degree of ordinary business care and prudence which reasonable taxpayers

would exercise under like circumstances.

However, in instances where a taxpayer might otherwise fall under the definition of civil

negligence generally subject to penalty, as Taxpayer does in the present matter, Section 7-1-69

(B) provides a limited exception: “[n]o penalty shall be assessed against a taxpayer if the failure

to pay an amount of tax when due results from a mistake of law made in good faith and on

reasonable grounds.” Regulation 3.1.11.11 (D) NMAC which implements Section 7-1-69 (B)

goes on to permit an abatement of penalty when “the taxpayer proves that the failure to pay tax

or to file a return was caused by reasonable reliance on the advice of competent tax counsel or

accountant as to the taxpayer’s liability after full disclosure of all relevant facts; failure to make a

timely filing of a tax return, however, is not excused by the taxpayer’s reliance on an agent[.]”

Black’s Law Dictionary, 22 (9th ed. 2009), defines “accountant” as “a person authorized under

applicable law to practice public accounting.”

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 10 of 15
Taxpayer in the present matter relied on a certified public accountant to compile the

information that Taxpayer would utilize to complete its CRS-1 reports and payments. However,

Taxpayer reserved the responsibility of filing and making payments for itself, and delegated the

responsibility to Manager. There was no evidence that Manager was a competent accountant as

that term is utilized in Regulation 3.1.11.11 (D) NMAC, nor was there any evidence to suggest

that Taxpayer reasonably relied on the advice of its certified public accountant or Manager in

underpaying its tax obligations.

Even if there was some scintilla of evidence to support a finding of reasonable reliance

on the advice of competent tax counsel or accountant, the second portion of the cited regulation

would nevertheless preclude abatement because failure to make a timely filing of a tax return is

not excused by Taxpayer’s reliance on an agent. Id. The evidence established that returns for

every period at issue were filed late, in addition to establishing that the amounts paid for those

periods were less than the amounts that were due.

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. Generally, a taxpayer

cannot “abdicate this responsibility merely by appointing an accountant as its agent in tax matters.”

See El Centro Villa Nursing Center v. Taxation and Revenue Department, 1989-NMCA-070, ¶14,

108 N.M. 795.

The Department did not allege that Taxpayer’s inaction was with the intent to evade or

defeat a tax and the Hearing Officer was persuaded that Taxpayer’s conduct was not in bad faith

or with bad intentions. However, El Centro Villa Nursing established that the civil negligence

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 11 of 15
penalty is appropriate in these circumstances and Regulation 3.1.11.11 (D) NMAC does not

provide grounds for abatement of the penalty in this case.

Therefore, Taxpayer has not overcome the presumption of correctness and failed to

establish that it is entitled to an abatement of penalty and interest in this matter. For the foregoing

reasons, Taxpayer’s protest is DENIED.

CONCLUSIONS OF LAW

A. Taxpayer filed a timely written protest to the assessments issued under Letter ID

Nos. L1561627952, L1024757040, L2098498864 and L0051678512 and jurisdiction lies over the

parties and the subject matter of this protest.

B. Despite Taxpayer’s failure to appear, the hearing on the merits conducted on

November 14, 2017 met the 90-day hearing requirement of NMSA 1978, Section 7-1B-8(A)

(2015). The Administrative Hearings Office promptly reset the hearing for December 20, 2017

upon the unopposed motion of the Taxpayer recognizing that decisions on the merits of a case

are favored.

C. Pursuant to NMSA 1978, Section 7-1-17 (C) (2007), the Department’s assessment

is presumed to be correct, and it is Taxpayer’s burden to come forward with evidence and legal

argument to establish that it is entitled to an abatement.

D. Under Section 7-1-67, Taxpayer is liable for interest under the assessments.

E. Taxpayer was negligent in failing to timely report and accurately pay gross

receipts and withholding taxes when due for the tax periods covered by the assessments.

Consequently, the assessment of penalty was proper under NMSA 1978, Section 7-1-69.

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 12 of 15
F. Taxpayer failed to establish non-negligence under 3.1.11.11 NMAC and El Centro

Villa Nursing Center v. Taxation and Revenue Department, 1989-NMCA-070, ¶14, 108 N.M. 795;

therefore, penalty was properly assessed.

G. As of December 20, 2017, Taxpayer’s liability under the assessments was

$3,558.88, although the sum due was expected to change depending on a credit balance that was

pending on Taxpayer’s account as of the date of the hearing.

For the foregoing reasons, Taxpayer’s protest is DENIED.

IT IS ORDERED that Taxpayer is liable for the assessed penalty and interest. The

Department is further ordered to provide Taxpayer an updated summary of outstanding penalty and

interest as Department Ex. I represented an estimate of what was due as of the date of the hearing

and was subject to change due to a pending credit which had not yet been applied.

DATED: January 24, 2018

Chris Romero
Hearing Officer
Administrative Hearings Office
Post Office Box 6400
Santa Fe, NM 87502

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 13 of 15
NOTICE OF RIGHT TO APPEAL

Pursuant to NMSA 1978, Section 7-1-25 (2015), 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. If an appeal is not timely filed with the Court of Appeals within 30 days, this

Decision and Order will become final. Rule of Appellate Procedure 12-601 NMRA articulates

the requirements of perfecting an appeal of an administrative decision with the Court of Appeals.

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 begin preparing the record proper. The parties will each be provided with a

copy of the record proper at the time of the filing of the record proper with the Court of Appeals,

which occurs within 14-days of the Administrative Hearings Office receipt of the docketing

statement from the appealing party. See Rule 12-209 NMRA.

In the Matter of the Protest of
Chamisa Hills Family Dental
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CERTIFICATE OF SERVICE

On January ___, 2018, a copy of the foregoing Decision and Order was mailed to the parties

listed below in the following manner:

In the Matter of the Protest of
Chamisa Hills Family Dental
Page 15 of 15