Ricardo D. Romero



On October 1, 2015, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the CRS reporting periods between January 1, 2012 and December 31, 2012.  On November 16, 2015, the Taxpayer protested the assessment.  The Taxpayer began his sole proprietorship as a real estate appraiser in 2012.  The Taxpayer had no experience with CRS returns or gross receipts tax and did not consult with any tax professional or Department employee, other than to obtain a CRS ID number.  The Taxpayer did not file CRS returns or pay gross receipts tax in 2012.  In 2013, the Taxpayer learned of the requirements to file CRS returns and pay gross receipts tax, and began doing so at that time.  That Taxpayer agrees that he owes the assessed tax principal.  The only issue to be decided is whether civil negligence penalty, imposed under Section 7-1-69 NMSA 1978 may be abated based on the Taxpayer’s lack of knowledge of the requirement to file CRS returns and pay gross receipts tax.  The imposition of penalty is mandatory in all instances where the Taxpayer’s action or inaction meets the legal definition of “negligence.”  Although the Taxpayer did not intentionally fail to pay taxes, his inaction though indifference, carelessness, erroneous belief or inattention does meet the definition of “negligence.”  The Taxpayer was not able to establish a good faith, mistake of law made on reasonable grounds, which could allow for abatement of penalty.   The Taxpayer’s protest was denied.