Tax Audit Protest and Appeal — New Mexico

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Tax Audit Protest and Appeal (NEW MEXICO)

Quick-Reference Summary

Part A — Informal Conference Request Letter

[TAXPAYER / FIRM NAME]
[________________________________]
[Street Address]
[________________________________]
[City], New Mexico [ZIP]
Telephone: [________________________________]
Email: [________________________________]
NM CRS / Taxpayer ID No.: [____________]
NM Bar No.: [____________] (if attorney)

Date: [__/__/____]

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA EMAIL (if address on Notice)

TO:
[Auditor Name]
Audit and Compliance Division
New Mexico Taxation and Revenue Department
[Auditor Address]
[________________________________]

RE: Request for Informal Audit Conference — Pre-Protest Resolution
Taxpayer: [TAXPAYER LEGAL NAME]
CRS/Taxpayer ID: [____________]
Notice of Assessment / Audit No.: [____________]
Tax Type(s): ☐ Gross Receipts Tax ☐ Compensating Tax ☐ Personal Income Tax ☐ Corporate Income Tax ☐ Withholding ☐ Other: [____________]
Period(s) at Issue: [__/__/____] through [__/__/____]
Proposed Assessment Total: $[__________] (Tax $[__________] / Interest $[__________] / Penalty $[__________])

Dear [Auditor Name]:

Pursuant to NMSA 1978, § 7-1-24(C) and the audit-resolution practice of the Audit and Compliance Division, Taxpayer respectfully requests an informal conference to discuss the proposed adjustments reflected in the [Notice of Proposed Assessment / Audit Report / Letter ID ____________] dated [__/__/____].

1. Items in Dispute. Taxpayer disputes the following audit adjustments:

2. Summary of Taxpayer's Position.
[________________________________________________________________________
________________________________________________________________________
________________________________________________________________________]

3. Documentation Available. Taxpayer can produce at the conference: ☐ NTTCs (Nontaxable Transaction Certificates); ☐ resale/sale-for-resale documentation; ☐ deduction substantiation under NMSA § 7-9-[____]; ☐ apportionment workpapers; ☐ federal Forms [____]; ☐ bank statements; ☐ invoices; ☐ other: [____________].

4. Preservation of Rights. This informal-conference request does not extend the 90-day protest deadline under NMSA § 7-1-24. Taxpayer reserves all rights and will timely file a formal protest with the Protest Office if necessary.

5. Availability. Taxpayer (and counsel) are available for an in-person, telephonic, or videoconference informal conference at the following times: [__________________________________].

Please contact the undersigned at [phone] or [email] to schedule.

Respectfully,

[________________________________]
[Name, Title]

cc: TRD Protest Office (informational copy)

Part B — Formal Protest / Petition (NMSA § 7-1-24)

BEFORE THE SECRETARY OF TAXATION AND REVENUE
STATE OF NEW MEXICO

PROTEST NO. [TO BE ASSIGNED BY TRD]

FORMAL PROTEST UNDER NMSA 1978, § 7-1-24

TO:
Secretary, New Mexico Taxation and Revenue Department
Attn: Protest Office
P.O. Box 1671
Santa Fe, NM 87504-1671

(Private carrier delivery: Joseph Montoya Building, 1100 S. St. Francis Drive, Suite 1100, Santa Fe, NM 87505-4147)

Date Filed: [__/__/____]

I. Identification of Taxpayer (NMSA § 7-1-24(B)(1))

1. Taxpayer: [TAXPAYER LEGAL NAME], a [individual / sole proprietor / single-member LLC / partnership / S corporation / C corporation / LLC] [organized under the laws of __________].
2. CRS/Taxpayer ID No.: [____________]
3. FEIN: [____________]
4. Mailing Address: [____________________________]
5. Authorized Representative: [Name, Bar No., Firm, Address, Phone, Email] (attach Power of Attorney, NM Form ACD-31102 or general POA)

II. Tax, Period, and Action Protested (NMSA § 7-1-24(B)(1))

6. Action Protested: ☐ Notice of Assessment ☐ Notice of Proposed Assessment ☐ Denial of Refund Claim ☐ Failure to Act on Refund Claim (deemed-denied after 210 days under § 7-1-26(C)) ☐ Denial of Credit/Rebate ☐ Other: [____________].
7. Notice/Letter ID: [____________] Mailing Date of Notice: [__/__/____]
8. Tax Type(s): [Gross Receipts Tax (Ch. 7, Art. 9) / Compensating Tax / Personal Income Tax (Ch. 7, Art. 2) / Corporate Income & Franchise Tax (Ch. 7, Art. 2A) / Withholding (Ch. 7, Art. 3A) / Severance / Other].
9. Reporting Period(s) at Issue: [__/__/____] through [__/__/____].
10. Amount in Dispute: Tax $[__________] / Interest $[__________] / Penalty $[__________] / Total $[__________].
11. Timeliness: This Protest is filed within 90 days after the mailing date of the notice and is therefore timely under NMSA § 7-1-24.
12. Election of Remedies (NMSA § 7-1-23): Taxpayer elects to protest the assessment without payment and waives the alternative pay-and-claim-refund remedy. ☐ Unprotested portion paid in full on [__/__/____] in the amount of $[__________] (or ☐ installment agreement entered under § 7-1-21).

III. Grounds for Protest (NMSA § 7-1-24(B)(2))

13. Ground 1 — [e.g., NTTC Properly Held; Receipts Deductible Under § 7-9-47]:
    Statement of grounds: [________________________________________________
    ________________________________________________________________________]
    Summary of evidence: [_________________________________________________
    ________________________________________________________________________]

14. Ground 2 — [e.g., Statute of Limitations Bars Assessment Under § 7-1-18]:
    Statement of grounds: [________________________________________________
    ________________________________________________________________________]
    Summary of evidence: [_________________________________________________
    ________________________________________________________________________]

15. Ground 3 — [e.g., Reasonable Cause Penalty Abatement Under § 7-1-69]:
    Statement of grounds: [________________________________________________
    ________________________________________________________________________]
    Summary of evidence: [_________________________________________________
    ________________________________________________________________________]

16. Ground 4 — [e.g., Apportionment / UDITPA Allocation; Constitutional Challenge]:
    Statement of grounds: [________________________________________________
    ________________________________________________________________________]
    Summary of evidence: [_________________________________________________
    ________________________________________________________________________]

IV. Affirmative Relief Requested (NMSA § 7-1-24(B)(3))

17. WHEREFORE, Taxpayer respectfully requests that the Secretary and, upon hearing, the Administrative Hearings Office:

A. Abate the assessment in full, or in the alternative reduce the assessment by $[__________];
B. Abate all penalties for reasonable cause under NMSA § 7-1-69;
C. Adjust interest accordingly;
D. Approve [refund claim / credit / rebate] in the amount of $[__________];
E. Schedule an informal conference under NMSA § 7-1-24(C) prior to AHO hearing;
F. Grant such other and further relief as is just and proper.

V. Hearing Request and Discovery

18. Taxpayer requests an administrative hearing before the Administrative Hearings Office under NMSA § 7-1B-8 and 22.600.3 NMAC.
19. Taxpayer reserves the right to amend this Protest under NMSA § 7-1-24(C) at any time up to 10 days before the hearing (or as the scheduling order provides).
20. Estimated hearing time: [____] hours. Anticipated witnesses: [____________].

Respectfully submitted this [____] day of [__________], [____].

[________________________________]
[Name], [Title]
[Firm Name] (if represented)
NM Bar No. [____________]
[Address]
[Phone] · [Email]

VERIFICATION (if required by NMAC)

I, [Name], declare under penalty of perjury under the laws of the State of New Mexico that the factual statements in this Protest are true and correct to the best of my knowledge.

Signature: [________________________________] Date: [__/__/____]

ATTACHMENTS

• Exhibit A — Copy of TRD Notice/Assessment dated [__/__/____]
• Exhibit B — Power of Attorney (Form ACD-31102)
• Exhibit C — Audit workpapers / NTTCs / supporting documentation
• Exhibit D — Election-of-remedies statement under § 7-1-23

Part C — Appeal Cover Letter to Tax Tribunal / Court

C-1. Hearing Request Form Cover Letter to Administrative Hearings Office (Post-Protest)

[FIRM LETTERHEAD]

Date: [__/__/____]

VIA EMAIL: [email protected]
AND VIA CERTIFIED MAIL, RRR

Administrative Hearings Office
P.O. Box 6400
Santa Fe, NM 87502

RE: Request for Hearing — [Taxpayer Name], CRS/Tax ID [____________]
TRD Protest No.: [____________] TRD Letter ID: [____________]
Tax Type / Period: [____________] / [__/__/____] – [__/__/____]
Amount in Dispute: $[__________]

Dear Chief Hearing Officer:

Enclosed for filing is the AHO Hearing Request Form on behalf of Taxpayer [NAME], together with a complete copy of the formal Protest filed with the TRD Protest Office on [__/__/____] under NMSA 1978, § 7-1-24, and the underlying TRD Notice dated [__/__/____].

Pursuant to NMSA § 7-1B-8, Taxpayer requests that the hearing be set within 90 days of receipt of this request. Taxpayer ☐ does ☐ does not consent to a videoconference hearing under AHO's Joint Request for Videoconference form.

Estimated hearing time: [____] hours. Anticipated witnesses: [____________]. Anticipated exhibits: [____________].

Counsel's Entry of Appearance (AHO form) is filed concurrently.

Respectfully,

[________________________________]
[Counsel Name], NM Bar No. [____________]

Enclosures: Hearing Request Form; Formal Protest with Exhibits; Entry of Appearance; Power of Attorney; TRD Notice.

C-2. Notice of Appeal to New Mexico Court of Appeals (Post-AHO Decision)

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Court of Appeals No. [TO BE ASSIGNED]
AHO D&O No.: [____________]

NOTICE OF APPEAL

Pursuant to NMSA 1978, § 7-1-25 and Rule 12-601 NMRA, Appellant [TAXPAYER NAME] hereby appeals to the New Mexico Court of Appeals from the Decision and Order entered by the Administrative Hearings Office on [__/__/____] in Protest No. [____________], a true and correct copy of which is attached as Exhibit 1.

This Notice is filed within thirty (30) days of the date of the AHO Decision and Order and is timely under NMSA § 7-1-25.

Issues Presented on Appeal (preliminary; subject to docketing statement under Rule 12-208 NMRA):

1. Whether the AHO erred as a matter of law in [____________].
2. Whether the AHO's findings of fact regarding [____________] are supported by substantial evidence in the administrative record.
3. Whether the AHO's application of NMSA § [____________] to Appellant's transactions is contrary to law.

Designation of Record: Appellant designates the entire AHO administrative record under 22.600.3.13 NMAC and Rule 12-601(C) NMRA.

Bond / Stay: ☐ No supersedeas bond requested. ☐ Stay sought under Rule 12-207 NMRA pending appeal.

Filed this [____] day of [__________], [____].

[________________________________]
[Counsel Name], NM Bar No. [____________]
[Firm], [Address], [Phone], [Email]

Certificate of Service: I hereby certify that on [__/__/____] a copy of this Notice of Appeal was served via [email/certified mail] on the New Mexico Taxation and Revenue Department, Office of General Counsel, P.O. Box 630, Santa Fe, NM 87504, and on the Administrative Hearings Office, P.O. Box 6400, Santa Fe, NM 87502.

[________________________________]
[Counsel Name]

Part D — Pre-Filing Checklist

Before Filing the Protest

☐ Calendar 90-day deadline from mailing date on TRD Notice (NMSA § 7-1-24). Mailing date — not receipt date — controls.
☐ Calendar 3-year refund-claim deadline under NMSA § 7-1-26 if pay-and-claim is the elected remedy.
☐ Confirm election of remedies under NMSA § 7-1-23 (irrevocable).
☐ Pay (or enter installment agreement under § 7-1-21 for) any unprotested portion of the assessment by the protest due date (§ 7-1-24(D)).
☐ Verify which tax program is at issue (GRT, CIT, PIT, WH, severance, oil-and-gas) and pull governing statute.
☐ Check SOL under NMSA § 7-1-18 (3-yr general / 6-yr 25%+ understatement / unlimited fraud or no-return).

Protest Content (NMSA § 7-1-24(B); 22.600.3 NMAC)

☐ Taxpayer name, CRS/Taxpayer ID, FEIN, mailing address, phone, email.
☐ Tax type and reporting period(s) clearly identified.
☐ Mailing date and Letter ID of the TRD Notice protested.
☐ Grounds stated for each adjustment, with summary of supporting evidence.
☐ Affirmative relief explicitly requested.
☐ Power of Attorney (Form ACD-31102 or general POA) signed and attached for any representative.
☐ Verification under penalty of perjury.
☐ All exhibits indexed (NTTCs, invoices, workpapers, prior correspondence).

Filing and Service

☐ Mail original Protest to Protest Office, P.O. Box 1671, Santa Fe, NM 87504-1671 via Certified Mail, Return Receipt Requested.
☐ Retain proof of postmark — the postmark date is the date of filing.
☐ If using private carrier, ship to 1100 S. St. Francis Drive, Suite 1100, Santa Fe, NM 87505-4147.
☐ Save copy of Protest + USPS Form 3811 in matter file.

Post-Protest

☐ Calendar AHO scheduling order deadlines (90-day hearing window; 180-day D&O window under § 7-1B-8).
☐ Prepare for informal conference with TRD Protest Auditor if offered (§ 7-1-24(C)).
☐ Comply with AHO discovery and pre-hearing scheduling order.
☐ Pre-mark exhibits; prepare witness list; submit any Joint Request for Videoconference.
☐ File any amendment to the Protest no later than 10 days before hearing (§ 7-1-24(C)) or per scheduling order.

Appeal (Post-D&O)

☐ Read AHO Decision and Order carefully — calendar 30-day appeal deadline to NM Court of Appeals (§ 7-1-25).
☐ File Notice of Appeal with NM Court of Appeals; serve TRD General Counsel and AHO.
☐ File Docketing Statement under Rule 12-208 NMRA.
☐ Designate administrative record under 22.600.3.13 NMAC.
☐ Consider supersedeas bond / stay under Rule 12-207 NMRA.
☐ Preserve constitutional issues raised below (review on the record only).

Sources and References

• TRD Protest Office overview — https://www.tax.newmexico.gov/all-nm-taxes/protest-office/
• NMSA 1978, § 7-1-24 (Disputing liabilities; administrative protest) — https://codes.findlaw.com/nm/chapter-7-taxation/nm-st-sect-7-1-24/
• NMSA 1978, § 7-1B-8 (AHO hearings; 90-day / 180-day) — https://law.justia.com/codes/new-mexico/2018/chapter-7/article-1b/section-7-1b-8/
• AHO Tax Protest Hearing Information — https://www.aho.state.nm.us/HearingsConducted/TaxProtestHearingInformation
• 22.600.3 NMAC (AHO Hearings Under Tax Administration Act) — https://www.srca.nm.gov/parts/title22/22.600.0003.html
• 22.600.2 NMAC (Code of Conduct for Administrative Hearings) — https://www.srca.nm.gov/parts/title22/22.600.0002.html
• AHO Hearing Request Form (fillable PDF) — https://www.aho.state.nm.us/docs/Forms/Hearing%20Request%20Formv08082019(SECURED).pdf
• TRD Decisions & Orders archive (§ 7-1-25 appeals) — https://www.tax.newmexico.gov/all-nm-taxes/tax-decisions-orders/
• NM Tax Administration Act (Ch. 7, Art. 1, NMSA 1978) — https://laws.nmonesource.com/w/nmos/Chapter-7-NMSA-1978
• NM Court of Appeals (Rules 12-208, 12-601 NMRA) — https://nmonesource.com/nmos/en/nav.do