Estate of Inez S. Van Tubergen

02-15

The Taxpayer is the estate of a New Mexico resident who died in September 1999. Following the decedent’s death, the personal representative discovered that an error in the administration of the estate of the decedent’s husband had created an additional estate tax liability for the decedent’s estate. The personal representative, who lives in Maryland, hired a New Mexico attorney to look into the matter. The attorney failed to resolve the problem and failed to return the personal representative’s phone calls.  In March 2000, the estate’s accountant, who also lives in Maryland, called the New Mexico Taxation and Revenue Department and explained the situation to a Department employee. The employee advised the accountant that if the matter were not resolved by June 15, 2000, the due date of the estate tax return, the estate should request an extension of time to file the return. The estate subsequently obtained a six-month extension. In April 2000, the Department sent the accountant the forms and instructions needed to file the New Mexico estate tax return. In June 2000, the accountant called the Department employee again and said the estate still had not resolved its legal problems and did not know whether it needed to file an estate tax return. The employee advised the accountant to retain an attorney to advise him as to the estate’s tax liability. The estate decided not to hire another attorney and eventually gave up on trying to correct the error that had created the additional tax liability. On December 15th 2000, the last day of the extended filing period, the estate filed a New Mexico Estate Tax Report with payment. In January 2001, the Department assessed the estate for interest due on the late payment of the estate tax that was originally due June 15, 2000. The estate protested the assessment, arguing that the estate should be excused from payment of interest because there were extenuating circumstances for the late payment and because the estate accountant was not given adequate advice by the Department.  Held:  The estate was late in paying estate taxes due to New Mexico and interest was properly assessed pursuant to Section 7-1-67 NMSA 1978.  The Department was not responsible for the estate’s failure to pay estate taxes on time, and is not estopped from assessing or collecting interest due on the late payment. Protest denied.