Case Manager – Teresa Maestas

13-12

The Taxpayer has worked as an independent contractor providing case-management services to developmentally disabled clients since October 2007. The company with which the Taxpayer contracts resells the Taxpayer’s services in its regular course of business to the State of New Mexico, Department of Health.  The Department became aware of a possible gross receipts tax liability through a discrepancy in the tape match between the Taxpayer’s Schedule C, filed with the IRS, and her CRS filings.  The Department mailed the Taxpayer a notice informing her of a limited scope gross receipts tax audit, and requesting that she present all executed Nontaxable Transaction Certificates (NTTCs) within 60 days.  In response to this, the Taxpayer requested an NTTC from the company she was contracting with, and received a Type 2 NTTC within the allotted time.  The Taxpayer accepted this NTTC as the document that she needed to send to the Department.  The Taxpayer sent the NTTC to the Department, and then received a letter informing her that a Type 2 was not the correct type for the deduction she claimed, and that the deadline for submitting NTTCs had passed.  The Department assessed the Taxpayer for gross receipts tax, penalty and interest.  The Taxpayer filed a protest to the assessment.  Several months after the 60 day deadline had passed, the Taxpayer received the correct Type 5 NTTC from the company.  The hearing officer found that the Taxpayer had timely  accepted the executed Type 2 NTTC in good faith and that, under the conclusive evidence provision of Section 7-9-43 NMSA 1978 and the case Leaco Rural Tel. Coop. v. Bureau of Revenue, 86 N.M. 629 (N.M. Ct. App. 1974), she was entitled to the deduction.  The Taxpayer’s protest was granted with respect to a 2008 assessment. However, because Taxpayer did not include the 2009 assessment in the protest letter, the hearing officer did not consider the 2009 assessment.