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Christopher X. O’Connor



On July 16, 2014, the Department issued the Taxpayer four assessments for gross receipts tax, penalty, and interest for the tax years ending December 31, 2008, 2009, 2010, and 2011.  The Taxpayer filed a protest to the assessments.  During the period in question, the Taxpayer was a licensed nurse in New Mexico who has provided long term in home care for a developmentally disabled patient.  The Taxpayer was initially an employee of Gentiva Health Service, receiving a salary and W-2s, when he began home care for the developmentally disabled patient.  When the developmentally disabled patient turned 21, he moved from the New Mexico Medically Fragile Child Program to the New Mexico Developmental Disabilities Waiver Program.  Gentiva Health Service did not participate in this program, and no longer provided care for the developmentally disabled patient.  For purposes of the program, the developmentally disabled patient’s mother is listed his caregiver, and receives payments directly from the program for his care, but is allowed to make payments to others for the patient’s respite care.  Beginning in June 2006, the Taxpayer provided that respite care and received payments from the patient’s mother.  When filing his federal income tax returns, the Taxpayer acknowledged that he had income as a self-employed business and filed federal Schedule SE and Schedule C-EZ.  The Taxpayer did not file or pay New Mexico gross receipts taxes during the relevant years.  In 2009, the Taxpayer also performed services for another client, for which he received a 1099-MISC.  On July 23, 2010, the Taxpayer was offered an opportunity to enter into the tax amnesty program for gross receipts tax for tax year 2007.  The Taxpayer contacted the Department employee listed as a contact for the amnesty, explained his situation, and was told by the employee that he would cancel the matter without any further action on the 2007 gross receipts tax.  The Taxpayer believed that his services were not subject to the gross receipts tax because of this conversation.  The Hearing Officer found that the Taxpayer was engaging in business for the period in question, and was unable to provide any evidence establishing he was an employee of the patient’s mother.  The penalty for negligence was abated for tax years 2010 and 2011, which were after the Taxpayer’s conversation with the Department employee, but the Taxpayer is liable for all other assessed gross receipts tax, penalty and interest.  The Taxpayer’s protest was granted in part and denied in part.