Robert N. Harris



The Taxpayer, a New Mexico resident, filed a 1998 New Mexico Personal Income Tax return in April 1999 claiming a $1,331 credit for prescription drugs.  In January 2002, the Department assessed the Taxpayer for tax, penalty and interest as a result of his claiming a prescription drug credit in excess of the $300 allowed by law. The Taxpayer protested the penalty and interest portion of the assessment, asserting that: (1) he properly completed his return based on the information contained on the Department’s PIT-1 form; and (2) the Department had an obligation to notify him of the additional tax due as soon as it processed his return. Held: (1) the Taxpayer was negligent in failing to read the Department’s instructions, which clearly notified taxpayers of the $300 limit on the credit for prescription drugs; (2) the Department’s assessment was issued within the statutory time limits set by the New Mexico Legislature and there is no basis for abating penalty or interest on the grounds of undue delay.  Protest denied.