{"id":4356,"date":"2015-12-07T15:59:58","date_gmt":"2015-12-07T22:59:58","guid":{"rendered":"https:\/\/www.tax.newmexico.gov\/all-nm-taxes\/?p=4356"},"modified":"2026-04-11T13:30:06","modified_gmt":"2026-04-11T19:30:06","slug":"santa-fe-baking-co","status":"publish","type":"post","link":"https:\/\/www.tax.newmexico.gov\/all-nm-taxes\/2015\/12\/07\/santa-fe-baking-co\/","title":{"rendered":"Santa Fe Baking Co."},"content":{"rendered":"<p>[et_pb_section fb_built=&#8221;1&#8243; _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221;][et_pb_row _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221;][et_pb_column _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221; type=&#8221;4_4&#8243;][et_pb_text _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221; hover_enabled=&#8221;0&#8243; sticky_enabled=&#8221;0&#8243;]<\/p>\n<div class=\"blogDateTitleContainer\">\n<div class=\"blogDateTitle\">12\/07\/2015<\/div>\n<\/div>\n<div class=\"blogItem\">\n<p><a href=\"https:\/\/realfile.tax.newmexico.gov\/15-36_santa_fe_baking_co.pdf\">15-36<\/a><\/p>\n<p>On March 11, 2015, the Department issued the Taxpayer six assessments for withholding tax, penalty and interest.\u00a0 On March 18, 2015, the Department issued an additional six assessments for gross receipts tax, penalty and interest.\u00a0 On June 17, 2015, the Taxpayer filed a protest of the assessments.\u00a0 The Taxpayer is a restaurant in Santa Fe, owned and operated by the same owner since 1998.\u00a0 The Taxpayer agreed that it owes the assessed tax principal and interest, so the only issue to the addressed at the hearing was the assessed penalty.\u00a0 During the period in question, the Taxpayer employed an office manager who was responsible for maintaining the financial records for the Taxpayer and for reporting and paying New Mexico combined reporting system (CRS) taxes.\u00a0 The Taxpayer also engaged the services of a CPA, but this was only to prepare federal tax filings based on the books maintained by the office manager.\u00a0 The office manager was not a CPA or otherwise trained in tax accounting methods.\u00a0 The owner of the Taxpayer focused primarily on the kitchen and trusted the office manager and the CPA to take care of all the financial aspects of the business.\u00a0 The owner realized there were problems when he learned of unpaid bills to vendors in the fall of 2014.\u00a0 In October 2014, the Taxpayer hired another CPA to audit its financial records.\u00a0 This CPA discovered that the Taxpayer had gone 33 months without reporting and paying gross receipts taxes, and he also found numerous errors and omissions related to accounting done by the office manager.\u00a0 This CPA recommended to the owner in May 2015 that the office manager be relieved of her duties.\u00a0 The office manager was relieved of her duties in September 2015.\u00a0 The Taxpayer argues that it was non-negligent, and that paying the\u00a0 assessed penalty would create economic hardship.\u00a0 The Taxpayer\u2019s arguments to establish non-negligence for purposes of penalty rely on three factors listed in Regulation 3.1.11.11 NMAC.\u00a0 The first is that the Taxpayer was affirmatively misled by a Department employee.\u00a0 The Taxpayer argued that it was misled by the Department\u2019s failure to detect the absence of filing and payments however, this does not equate to being misled by a Department employee.\u00a0 Second, the Taxpayer argued that the office manager did such a poor job in maintaining the books, they were effectively physically damaged, which is another potential factor.\u00a0 This argument is not relevant in this situation, as this applies when records are damaged by something like a flood or fire at the place of business.\u00a0 Last, one factor that can help to establish non-negligence is reasonable reliance on advice of competent tax counsel or an accountant.\u00a0 While the Taxpayer did employ a CPA to assist with federal tax filings, only the office manager, who was not a CPA or tax accountant, was responsible with maintaining the financial records and filing and paying the CRS taxes.\u00a0 None of the arguments presented by the Taxpayer, including that of financial hardship, establish any reasonable grounds for abatement of penalty.\u00a0 The Taxpayer\u2019s protest was denied.<\/p>\n<\/div>\n<p>[\/et_pb_text][et_pb_text _builder_version=&#8221;4.6.6&#8243; _module_preset=&#8221;default&#8221;]<\/p>\n<p><a href=\"\/all-nm-taxes\/tax-decisions-orders\/\">Back to Tax Decisions &amp; Orders<\/a><\/p>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>12\/07\/2015 15-36 On March 11, 2015, the Department issued the Taxpayer six assessments for withholding tax, penalty and interest.\u00a0 On March 18, 2015, the Department issued an additional six assessments for gross receipts tax, penalty and interest.\u00a0 On June 17, 2015, the Taxpayer filed a protest of the assessments.\u00a0 The Taxpayer is a restaurant in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"960","footnotes":""},"categories":[43],"tags":[],"class_list":["post-4356","post","type-post","status-publish","format-standard","hentry","category-tax-decisions-orders"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Santa Fe Baking Co. : All NM Taxes<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.tax.newmexico.gov\/all-nm-taxes\/2015\/12\/07\/santa-fe-baking-co\/\" \/>\n<meta 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