The Taxpayer filed a timely New Mexico personal income tax return for the 2004 tax year. Using the federal tape match the Department found that the income reported on the Taxpayer’s federal income tax return was substantially higher than the amount reported on her New Mexico return. This discrepancy occurred because the Taxpayer did not include income she received from her ex-husband’s pension on her New Mexico return. Upon completion of a limited scope audit of the taxpayer’s account, the Department determined that she underreported her New Mexico income tax by $1,126.00. The Department assessed the Taxpayer for the additional tax due plus penalty and interest. The Taxpayer paid the principal amount to stop the accrual of interest and filed a written protest because she felt that she did not owe the tax, and therefore did not owe the penalty and interest. If the tax was found to be owed, the Taxpayer did not argue that she would also owe the penalty and interest. The basis behind the protest was that the Taxpayer believed that if state taxes were not withheld then they were not owed. She also believed that her taxes may have been withheld from her ex-husband’s portion of the pension. At the administrative hearing, the Taxpayer claimed that she had received written advice from the Department after she inquired about the same issue on her 2003 tax year return stating that she should not include the income because taxes were not withheld. The Taxpayer was not able to produce these documents. The Taxpayer was also not able to produce any documents to prove that her ex-husband had paid the tax on the full amount of the pension, including her share. Further, the instructions on the PIT-1 form clearly state that the federal adjusted gross income is to be entered on line five of the New Mexico PIT-1 form, and the Taxpayer ignored these instructions. The hearing officer found that the Taxpayer was liable for the tax owed on the retirement income she received, as well as the penalty and interest. The protest was denied.