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Joel W. & Jacqueline R. Draham



On June 6, 2017, the Department issued a return adjustment notice for the Taxpayers’ 2016 personal income tax (PIT) return. On August 23, 2017, the Taxpayers submitted a formal protest with the Department. The adjustment was based on the W-2’s submitted with the return and the Taxpayers’ domicile. At the time of the hearing, the Department indicated that no further documentation was provided to establish that the Taxpayer had any entitlement to the refund amount in dispute. The issue to be decided in the hearing is whether the Taxpayers were entitled to a refund equivalent to the portion of taxes withheld and paid to the State of New Mexico on the W-2. One of the Taxpayers moved out of state for part of the year while the other Taxpayer remained in New Mexico with the Taxpayers’ dependent. The income from the Taxpayer residing in New Mexico with the Dependent is not in question. The Department argued that there was not sufficient evidence to show that the Taxpayer that had moved out of state had changed domicile to another state as early as asserted. The Taxpayers’ claim for refund is premised on an overpayment of tax based on one of the Taxpayers being domiciled in another state. The Department argued that the Taxpayer did not show enough evidence to support the time indicated that was spend out of the state. The Hearing Officer states that everyone is deemed to be domiciled somewhere and once that domicile is established it does not change until the person moves ‘with the bona fide intention” of making a new location that persons permanent home. Domicile is what helps to establish a taxpayer’s residency. Per Regulation NMAC, there are thirteen factors to help determine a taxpayer’s domicile. The Hearing Officer determined that eight of those factors weighed in favor of the Department, five were neutral, and zero weighed in favor of the Taxpayer. Based upon the information provided, the Hearing Officer determined that the Taxpayer failed to establish an entitlement to the refund that was subject of the protest. The Taxpayers’ protest was denied.