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William & Jane Kellerman



On December 16, 2009, the Department assessed Taxpayers, a married couple filing jointly, for personal income tax, penalty and interest for tax years 2003 through 2006.  One spouse has always been a New Mexico resident, while the other, William Kellerman, claimed to be a resident of Texas.  During the tax years in question, Mr. Kellerman was a pilot and flew mainly out of Texas, where he rented a condominium and obtained a driver’s license.  During this time, the Taxpayer’s owned a home in Albuquerque and Mr. Kellerman conducted his day-to-day affairs almost exclusively in Albuquerque.  Mrs. Kellerman resided exclusively at the home in Albuquerque and paid all of their bills in Albuquerque.  The issue to be decided is whether Mr. Kellerman was a resident of New Mexico during the tax years in question.  The question presented was whether Mr. Kellerman established actual residency in Texas with intent to abandon New Mexico and make Texas his permanent home.  The hearing officer found that, for each year, there was more than sufficient evidence to support the Department’s position that Mr. Kellerman did not intend to abandon New Mexico as his home state and that he was domiciled in New Mexico and a resident for New Mexico personal income tax purposes.  Also applying the New Mexico’s 185 day physical presence requirement, Mr. Kellerman spent close to that amount of time in New Mexico each of the years in question.  The hearing officer also found that ten percent of the penalty assessed should be abated because the amount imposed should not have exceeded the ten percent penalty allowed at the time these taxes were due.  The Taxpayer’s protest was granted in part and denied in part.?