The Taxpayer was engaged in the construction business in New Mexico. In December 2001, the Department assessed the Taxpayer for gross receipts tax, penalty and interest due for the 1999 tax year. In January 2002, the Taxpayer mailed a written protest to the Department’s Revenue Processing Division, instead of to the address he was directed to use in the Department’s instructions. The Protest Office did not receive the letter and asked the Taxpayer to send another copy. The Taxpayer then mailed a copy to an unknown address and it was returned by the Post Office. The Protest Office finally received the Taxpayer’s protest letter in May 2002. The Taxpayer reached a partial settlement with the Department, but continued to protest the assessment of penalty and interest, arguing: 1) he was not negligent in failing to pay the tax due because he reasonably relied on a tax accounting service to prepare his returns; and 2) the Department waited an unreasonable period of time to respond to his protest. Held: the Taxpayer never discussed his gross receipts tax liability with the accounting service and his reliance on the accounting service does not meet the standard for nonnegligence set out in the Department’s regulations; 2) due to errors made by the Taxpayer in mailing his protest, there was no undue delay in the Department’s response, nor would such a delay justify abatement under New Mexico case law. Protest denied.
Red Mesa Construction