The state changed its tax form but I never got the notice and kept using the old one — can I be penalized for filing late when I had to re-file on the new form?

Plain-English summary

Mary Feldblum files monthly gross receipts tax (GRT) returns, with receipts to report only a few months a year. For years she used the paper CRS-1 Combined Report Form, mailing it (with a check) in months she owed tax to avoid the online system's credit-card fee, and filing online in months with no payment.

New Mexico changed the form: as of July 2021, the CRS-1 would no longer be accepted, and most taxpayers had to use new form TRD-41413. The Department mailed a change notice and later "wrong form" letters to Feldblum's correct PO Box, but she never received them. In her no-payment months she filed online, where the system automatically used the new form, so she never noticed anything had changed.

In November 2022 she timely mailed her October 2022 return on the old CRS-1 form (due November 28, because November 25 was the day-after-Thanksgiving holiday). The Department did not process it — wrong form — and sent a letter she did receive. She promptly re-filed on the new TRD-41413 form on December 6. The Department then assessed a $26.44 late-filing penalty because the re-filed return came after the November 28 due date.

Hearing Officer Dee Dee Hoxie granted the protest and abated the penalty:

• Penalty requires negligence or disregard of the rules — neither was present. A late-filing penalty under Section 7-1-69 applies only when the failure results from negligence or disregard of the Department's regulations. Feldblum's original return was filed on time and on the CRS-1 form that the Department's own regulation (3.2.2.15 NMAC) still specified — a rule that had not been amended or repealed. Using the form the regulation named is compliance, not disregard.
• She rebutted the presumption that the mailed notices were received. A properly addressed, mailed notice is presumed received (Section 7-1-9; Garmond v. Kinney), but that presumption can be rebutted. Feldblum's testimony was credible — she keeps a folder of all Department correspondence and consistently said she never got the change notices — and her prompt re-filing once she did receive notice reinforced her credibility. So she was not negligent.

The penalty was abated in full.

What this means for you

Taxpayers caught out by a changed form or procedure

If the tax agency changes a form and you genuinely never received the notice, a penalty is not automatic. Penalties turn on negligence or disregard of the rules — so filing on time, in good faith, on the form the written regulation still names can defeat a penalty even after the agency has announced a switch.

Anyone disputing that they received an official notice

The Department is presumed to have given notice if it mailed the letter to your correct address — but that presumption is rebuttable. What helped here: credible, consistent testimony that the notices were never received, an organized folder of all correspondence, and prompt action the moment the taxpayer actually learned of the change. Keep your records and act quickly, and keep your address current.

Small or seasonal filers

If you only file some months, be alert that online and paper channels can diverge — the online system may quietly adopt a new form while your paper filings still use the old one. Periodically confirm you are filing on the current form, especially if you switch between mailing and e-filing.

Common questions

Q: The state changed the form. Can it penalize me for using the old one?
A: Not automatically. A penalty requires negligence or disregard of the rules. If you filed on time on the form the regulation still specified, and you never received notice of the change, you may not be negligent — as happened here.

Q: The Department says it mailed me the notice. Isn't that enough?
A: A mailed, correctly addressed notice is presumed received, but you can rebut that presumption with credible evidence that you never got it. This taxpayer did, with consistent testimony and prompt action once she was actually notified.

Q: Why was the old CRS-1 form still "compliant" if the Department had switched forms?
A: Because the underlying regulation (3.2.2.15 NMAC) still named the CRS-1 form and had not been amended or repealed. The Department can prescribe a new form, but the taxpayer's use of the form the rule still specified was treated as compliance, not disregard.

Q: Can I rely on this decision for my own situation?
A: Not directly. A Decision and Order resolves one taxpayer's protest on its specific facts and is not a general ruling or advisory opinion of the Department. It does illustrate that penalties require negligence and that the mailing presumption of notice can be rebutted.

Citations and references

Statutes and regulations:

• NMSA 1978, § 7-1-69(A) (2021); 3.1.11.10, 3.1.11.11 NMAC — penalty applies only to a failure caused by negligence or disregard of the rules; definitions of negligence/non-negligence
• NMSA 1978, § 7-1-13(B) (2021); 3.2.2.15 NMAC — returns must be filed in the prescribed form; GRT returns filed on the CRS-1 form
• NMSA 1978, § 7-1-9 — notice is effective if mailed to the last known address
• NMSA 1978, § 7-1-17 (2007); 3.1.6.12(A), 3.1.6.13 NMAC — assessment (including penalty) presumed correct; threshold rebuttal burden
• 3.2.2.10 NMAC (2001) — a due date on a weekend or holiday moves to the next business day (October return due November 28, 2022)
• NMSA 1978, § 9-11-6.2 (2015) — Department's authority to prescribe forms and enact regulations

Cases:

• Garmond v. Kinney, 1978-NMSC-043, 91 N.M. 646 (a properly addressed, mailed letter is presumed received)
• State Farm Fire & Casualty Co. v. Price, 1984-NMCA-036, 101 N.M. 438; Cordova v. State, 2005-NMCA-009, 136 N.M. 713; DeArmond v. Halliburton, 2003-NMCA-148, 134 N.M. 630 (the presumption of receipt by mail can be rebutted on the specific facts)
• Maso v. State, 2004-NMSC-028, 136 N.M. 161 (notice is sufficient if reasonably calculated to apprise the party)
• Gemini Las Colinas, LLC v. N.M. Taxation & Revenue Dep't, 2023-NMCA-039 (burden framework); MPC Ltd. v. N.M. Taxation & Revenue Dep't, 2003-NMCA-021 (burden shifts once the presumption is rebutted)

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Mary Feldblum
• Decision PDF: D&O 23-13

Original ruling text

1 STATE OF NEW MEXICO
2 ADMINISTRATIVE HEARINGS OFFICE
3 TAX ADMINISTRATION ACT

4 IN THE MATTER OF THE PROTEST OF
5 MARY FELDBLUM
6 TO THE ASSESSMENT
7 ISSUED UNDER LETTER ID NO. L1805080688

8 v. AHO No. 23.05-016A, D&O No. 23-13

9 NEW MEXICO TAXATION AND REVENUE DEPARTMENT

10 DECISION AND ORDER

11 On June 29, 2023, Hearing Officer Dee Dee Hoxie, Esq. conducted a videoconference

12 hearing on the merits of the protest to the assessment. See NMSA 1978, § 7-1B-8 (H) (2019).

13 The Taxation and Revenue Department (Department) was represented by Peter Breen, Staff

14 Attorney, and Lizette Rivera, Auditor, who both appeared by videoconference. Mary Feldblum

15 (Taxpayer) was present by videoconference. The Taxpayer and Ms. Rivera testified. The

16 Hearing Officer took notice of all documents in the administrative file. On June 28, 2023, the

17 Department filed a notice of intent with attached exhibits A through I. The Department moved

18 for their admission at the hearing. There was no objection, and the Department’s exhibits A

19 (protest letter); B (CRS-1 form tax return); C (TRD-41413 form tax return); D (letter from the

20 Taxpayer); E (check); F (envelope); G (notice letter); H (improper tax return letter January

21 2022); and I (improper tax return letter November 2022) were admitted.

22 The main issue to be decided is whether the Taxpayer is liable for the penalty. The

23 penalty was assessed for late filing of a return on a new form. The Hearing Officer considered

24 all of the evidence and arguments presented by both parties. Because the Taxpayer filed a timely

25 tax return on a form that complied with the Department’s regulation, she was not negligent and

Mary Feldblum
Case No. 23.05-016A
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1 was not in disregard to the regulations. Consequently, the Hearing Officer finds in favor of the

2 Taxpayer. IT IS DECIDED AND ORDERED AS FOLLOWS:

3 FINDINGS OF FACT

4 Procedural findings.

5 1. On December 19, 2022, the Department issued a notice of assessment to the

6 Taxpayer for the tax period ending on October 31, 2022. The assessment was for penalty of

7 $26.44 regarding a late-filed gross receipts tax return. [Testimony of the Taxpayer; Testimony

8 of Ms. Rivera; Admin. file L1805080688].

9 2. On December 27, 2022, the Taxpayer filed a timely written protest to the

10 assessment. [Exhibit A].

11 3. On February 28, 2023, the Department acknowledged its receipt of the protest.

12 [Admin. file L1247040624].

13 4. On May 16, 2023, the Department filed a request for hearing and an answer to the

14 protest with the Administrative Hearings Office. [Admin. file].

15 5. On June 29, 2023, the hearing was conducted, which was within 90 days of the

16 request as required by statute. [Admin. file].

17 Substantive findings.

18 6. The Taxpayer files monthly gross receipts tax (GRT) returns. [Testimony of the

19 Taxpayer; Testimony of Ms. Rivera].

20 7. The Taxpayer typically has gross receipts to report only a few months out of the

21 year. [Testimony of the Taxpayer; Exhibit D].

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Case No. 23.05-016A
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1 8. When the Taxpayer does not need to make a payment with her GRT return, she

2 files the GRT return online. [Testimony of the Taxpayer; Testimony of Ms. Rivera].

3 9. When the Taxpayer needs to make a payment with her GRT return, she files the

4 GRT return by mail and includes the payment. The Taxpayer chooses not to use the online

5 system for payments because it adds an additional credit card fee. [Testimony of the Taxpayer].

6 10. For many years, the Taxpayer used the same paper form to file her GRT return,

7 which was the CRS-1 Combined Report Form (CRS-1 form). [Testimony of the Taxpayer;

8 Exhibit B; Exhibit G].

9 11. The Department mailed a letter (the notice) to the Taxpayer to notify her of

10 changes to the business tax system. The notice indicated that as of July 2021, the CRS-1 form

11 would no longer be accepted. The notice advised that for most taxpayers, the GRT return would

12 now be on form TRD-41413. [Testimony of Ms. Rivera; Exhibit G].

13 12. The notice was mailed to the Taxpayer at a PO Box, which was the address on

14 file, and remains the same address that the Taxpayer currently uses1. [Testimony of Ms. Rivera;

15 Exhibit G; Exhibit A; Exhibit C; Exhibit D; Exhibit E; Exhibit F].

16 13. The Taxpayer did not receive the notice. [Testimony of the Taxpayer; Exhibit D;

17 Exhibit A].

18 14. In January 2022, the Taxpayer filed a GRT return by mail, using the CRS-1 form,

19 and made a payment. [Testimony of the Taxpayer; Exhibit D].

20 15. On January 21, 2022, the Department mailed a letter to the Taxpayer to advise

21 that her GRT return for the tax period ending December 31, 2021 was not processed as it was on

22 the wrong form. [Testimony of Ms. Rivera; Exhibit H].

1
All mailings from the Department used the same PO Box address.
Mary Feldblum
Case No. 23.05-016A
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1 16. The Taxpayer did not receive Exhibit H. [Testimony of the Taxpayer; Exhibit D;

2 Exhibit A].

3 17. Between January and November 2022, the Taxpayer filed her GRT returns using

4 the online system as she did not have payments to make during those months. [Testimony of the

5 Taxpayer; Testimony of Ms. Rivera].

6 18. The Taxpayer used the correct GRT return forms for those months. [Testimony

7 of Ms. Rivera].

8 19. The Taxpayer’s use of the correct form for those months was due to the automatic

9 functioning of the online filing system, and the Taxpayer did not realize that there had been any

10 change to the form as she was required to put in the same information as she had always been

11 required to put into the GRT return form. [Testimony of the Taxpayer; Exhibit G].

12 20. On or about November 12, 2022, the Taxpayer filed a GRT return by mail, using

13 the CRS-1 form, and made a payment for the tax period ending October 31, 2022. [Testimony of

14 the Taxpayer; Testimony of Ms. Rivera; Exhibit I; Exhibit B; Exhibit E].

15 21. The Taxpayer’s GRT return on the CRS-1 form was filed timely. [Testimony of

16 the Taxpayer; Exhibit B; Exhibit E; Exhibit I]. See NMSA 1978, § 7-9-11 (1969) (indicating

17 GRT is due the 25th of the month following the taxable event). See also NMSA 1978, § 7-1-13

18 (B) (2021) indicating returns are due the same date as the tax is due).

19 22. On November 29, 2022, the Department mailed a letter to the Taxpayer to advise

20 that her GRT return for the tax period ending October 31, 2022 was not processed as it was on

21 the wrong form. [Testimony of Ms. Rivera; Exhibit I].

22 23. The Taxpayer received Exhibit I. [Testimony of the Taxpayer; Exhibit D].

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Case No. 23.05-016A
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1 24. On December 6, 2022, after receiving Exhibit I, the Taxpayer promptly re-filed

2 her October GRT return using the new form TRD-41413. [Exhibit D; Exhibit C].

3 25. On December 19, 2022, the Department assessed the Taxpayer a penalty on the

4 re-filed October GRT return because it was filed after the due date of November 28, 20222.

5 [Testimony of the Taxpayer; Testimony of Ms. Rivera; L1805080688].

6 DISCUSSION

7 Burden of proof.

8 “The taxpayer shall have the burden of proof, except as otherwise provided by law.”

9 22.600.3.24 (B) NMAC (2020. Assessments by the Department are presumed to be correct. See

10 NMSA 1978, § 7-1-17 (2007). Consequently, the assessment against is the Taxpayer is

11 presumed to be correct. See id. See El Centro Villa Nursing Ctr. v. Taxation and Revenue

12 Department, 1989-NMCA-070, 108 N.M. 795. See also Archuleta v. O'Cheskey, 1972-NMCA-

13 165, ¶11, 84 N.M. 428. See also N.M. Taxation & Revenue Dep't v. Casias Trucking, 2014-

14 NMCA-099, ¶8. The presumption extends to the assessment of penalty and interest. See 3.1.6.13

15 NMAC (2001).

16 “The effect of the presumption of correctness is that the taxpayer has the burden of coming

17 forward with some countervailing evidence tending to dispute the factual correctness of the

18 assessment”. 3.1.6.12 (A) NMAC (2001) (emphasis added). The Taxpayer bears the burden of

19 proving her case. See Gemini Las Colinas, LLC, 2023-NMCA-__. See also 22.600.1.18 and

20 22.600.3.24 NMAC. When a taxpayer presents sufficient evidence to rebut the presumption, the

21 burden shifts to the Department to show that the assessment is correct. See Gemini Las Colinas,

2
When the 25th day of the month falls on a weekend or a holiday, the deadline is extended to the following business
day. See 3.2.2.10 NMAC (2001). November 25, 2022 fell on the Friday after Thanksgiving, which is an observed
holiday date by the state of New Mexico.
Mary Feldblum
Case No. 23.05-016A
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1 LLC, 2023-NMCA-__. See also MPC Ltd. v. N.M. Taxation & Revenue Dep't, 2003-NMCA-21,

2 ¶13, 133 N.M. 217.

3 Penalty.

4 When there is a “failure due to negligence or disregard of department rules and regulations,

5 but without intent to evade or defeat a tax, … to file by the date required a return…, there shall be

6 added to the amount assessed a penalty”. NMSA 1978, § 7-1-69 (A) (2021). See also 3.1.4.10 (A)

7 NMAC (2021). “Every taxpayer shall, on or before the date on which payment of any tax is due,

8 complete and file a tax return in a form prescribed and according to the regulations issued by the

9 secretary.” NMSA 1978, § 7-1-13 (B) (emphasis added). For GRT, taxpayers “must file a CRS-1

10 Combined Report Form for each reporting period”. 3.2.2.15 NMAC (2001) (emphasis added).

11 The purpose of the Department’s regulations is “to interpret, exemplify, implement and

12 enforce the provisions of the Gross Receipts and Compensating Tax Act.” 3.2.1.6 NMAC

13 (2021). The Department has authority to enact regulations that interpret and exemplify the

14 statutes to which they relate. See NMSA 1978, § 9-11-6.2 (B) (1) (2015). The Department’s

15 regulations also carry a presumption that they are a “proper implementation of the provisions of

16 the laws”. NMSA 1978, § 9-11-6.2 (G). The Department’s authority to enact regulations

17 includes the power to amend or to repeal a regulation when it becomes necessary to do so “by

18 reason of any alteration of any such law.” Id.

19 The Taxpayer filed her October GRT return on or before the date that the payment of tax

20 was due. See NMSA 1978, § 7-9-11 and § 7-1-13. [Testimony of the Taxpayer; Exhibit B; Exhibit

21 E]. The Taxpayer filed her October GRT return using a CRS-1 form, which is the form that the

22 regulation specifies must be used. See 3.2.2.15 NMAC. [Testimony of Taxpayer; Exhibit B;

23 Exhibit E; Exhibit I]. As the Taxpayer complied with the Department’s regulation for filing a GRT

Mary Feldblum
Case No. 23.05-016A
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1 return on a CRS-1 form and her GRT return was filed on or before the due date, she was not

2 negligent or in disregard to the Department’s rules and regulations. See NMSA 1978, § 7-1-69.

3 Therefore, penalty should be abated. See id.

4 Despite the Taxpayer’s compliance with the Department’s own regulations, the Department

5 argues that penalty is appropriate because the Taxpayer disregarded its notices regarding the change

6 to the GRT return form. Generally, notice is effective if it is mailed to the correct last known

7 address. See NMSA 1978, § 7-1-9. “A properly addressed letter that is mailed is presumed to be

8 received.” Garmond v. Kinney, 1978-NMSC-043, ¶6, 91 N.M. 646. Generally, actual notice is

9 not required, and notice is presumed when it was given by means reasonably calculated to

10 apprise the parties. See Maso v. State, 2004-NMSC-028, ¶ 10, 136 N.M. 161. See also Cordova

11 v. State, 2005-NMCA-009, 136 N.M. 713. The Department mailed Exhibit G and Exhibit H to

12 the Taxpayer at the correct address, which remains her address. Therefore, the Department

13 presumed that the Taxpayer had notice of the change of form. See NMSA 1978, § 7-1-9. See

14 also Garmond, 1978-NMSC-043. See also Cordova, 2005-NMCA-009.

15 However, a party may rebut the presumption that notice sent in a properly addressed

16 letter was received. See State Farm Fire & Casualty Co. v. Price, 1984, NMCA-036, ¶ 24, 101

17 N.M. 438. Moreover, the adequacy of notice is not determined by the information available to

18 the sender at the time of the mailing and the specific facts of each case should be considered in

19 determining whether notice was given. See Cordova, 2005-NMCA-009 at ¶ 24. See also

20 DeArmond v. Halliburton, 2003-NMCA-148, ¶ 15, 134 N.M. 630 (holding that the specific facts

21 of the case refuted the presumption of notice by mailing).

22 The Taxpayer successfully rebutted the presumption that Exhibit G and Exhibit H, which

23 would have notified her of the change of form for GRT returns, was received. See State Farm

Mary Feldblum
Case No. 23.05-016A
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1 Fire & Casualty Co., 1984-NMCA-036. See Cordova, 2005-NMCA-009. See also DeArmond,

2 2003-NMCA-148. The Taxpayer testified that she did not receive Exhibit G and Exhibit H and

3 that she keeps copies of all correspondence with the Department in a folder, which she had

4 available for inspection if it was requested. The Taxpayer’s testimony is credible and supported

5 by her consistent statements throughout the course of the protest3 that she did not receive notice

6 of the change until she received Exhibit I. Her credibility is also supported by the fact that she

7 promptly took action to file the new form4 upon her receipt of Exhibit I. Therefore, the Taxpayer

8 was not negligent. See NMSA 1978, § 7-1-69. See also 3.1.11.10 NMAC (2001). See also

9 3.1.11.11 NMAC (2001).

10 The issue in this case is not about the Department’s ability to change the form for filing

11 GRT returns from the CRS-1 form to the TRD-41413 form. The Department has the authority to

12 proscribe the form that must be used and to issue instructions as to the use of that new form. See

13 NMSA 1978, § 7-1-13 (B). See also NMSA 1978, § 9-11-6.2. The issue in this protest is

14 whether the Taxpayer was in disregard of the regulations or was negligent for purposes of

15 applying a penalty based on the facts of this protest. See NMSA 1978, § 7-1-69.

16 A failure to file due to disregarding the Department’s rules and regulations or due to

17 negligence can result in penalty. See id. The statute requires compliance with the regulation for

18 filing a return. See NMSA 1978, § 7-1-13 (B). The regulation requires that a CRS-1 form be

19 filed. See 3.2.2.15 NMAC. The Department’s regulation is presumed to be proper and has not

20 been repealed. See NMSA 1978, § 9-11-6.2. Therefore, the Taxpayer filed a CRS-1 form in

21 compliance, not in disregard, to the regulation. See 3.2.2.15 NMAC. See NMSA 1978, § 7-1-

22 69. See also 3.1.11.10 NMAC (2001). See also 3.1.11.11 NMAC (2001). The Taxpayer did not

3
In Exhibit A and Exhibit D.
4
Exhibit C.
Mary Feldblum
Case No. 23.05-016A
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1 receive notice of the Department’s new rules; therefore, she was not negligent in her use of the

2 old form that complied with the regulation. See NMSA 1978, § 7-1-69. See also 3.1.11.10

3 NMAC (2001). See also 3.1.11.11 NMAC (2001).

4 CONCLUSIONS OF LAW

5 A. The Taxpayer filed a timely written protest of the Department’s assessment and

6 jurisdiction lies over the parties and the subject matter of this protest. See NMSA 1978, § 7-1B-8

7 (2019).

8 B. The hearing was timely set and held within 90 days of the request for hearing. See

9 id.

10 C. The Taxpayer filed a timely GRT return on a CRS-1 form as required by the statutes

11 and regulations. See NMSA 1978, § 7-1-13. See also 3.2.2.15 NMAC.

12 D. The Taxpayer was not negligent and was not in disregard to the Department’s

13 regulations. See NMSA 1978, § 7-1-69. See also 3.2.11.10 and 3.2.11.11 NMAC.

14 E. As the Taxpayer was not negligent and not in disregard to the Department’s

15 regulations, penalty does not apply. See NMSA 1978, § 7-1-69.

16 For the foregoing reasons, the Taxpayer’s protest IS GRANTED. IT IS ORDERED that

17 the $26.44 of assessed penalty is HEREBY ABATED.

18 DATED: August 2, 2023.

19 Dee Dee Hoxie
20 Dee Dee Hoxie
21 Hearing Officer
22 Administrative Hearings Office
23 P.O. Box 6400
24 Santa Fe, NM 87502

Mary Feldblum
Case No. 23.05-016A
page 9 of 10
1 NOTICE OF RIGHT TO APPEAL

2 Pursuant to NMSA 1978, Section 7-1-25 (2015), the parties have the right to appeal this

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

4 date shown above. If an appeal is not timely filed with the Court of Appeals within 30 days, this

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

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

7 Either party filing an appeal shall file a courtesy copy of the appeal with the Administrative

8 Hearings Office contemporaneous with the Court of Appeals filing so that the Administrative

9 Hearings Office may begin preparing the record proper. The parties will each be provided with a

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

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

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

13 CERTIFICATE OF SERVICE
14 On August 2, 2023, a copy of the foregoing Decision and Order was submitted to the parties

15 listed below in the following manner:

16 First Class Mail & Email First Class Mail & Email
17
18 INTENTIONALLY BLANK

Mary Feldblum
Case No. 23.05-016A
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