Jesus Hernandez



The Taxpayer provided services in New Mexico in 2005 and 2006.  The Taxpayer failed to file gross receipts tax for those years.  The Department determined that the Taxpayer was a non-filer through the federal tape-match with the Schedule C of his federal tax return.  The Department assessed the Taxpayer for gross receipts tax, penalty and interest for 2005 and 2006.  The Taxpayer filed a formal protest to these assessments.    The Taxpayer did not dispute that he owed the gross receipts tax, so the issue to be decided is in regard to the penalty and interest.  The Taxpayer established that he had used an accountant to determine his tax obligations and trusted the accountant when the accountant said that all of his   taxes were being filed correctly.  The accountant refused to appear as a witness at the hearing, but he   did write a letter to the Department explaining that he had negligently failed to properly advise the Taxpayer about filing gross receipts tax. The hearing officer found that the Taxpayer has reasonably relied on the advice of a licensed accountant, and that the Taxpayer was not negligent.  The penalty was ordered to be abated.  Interest is required to be paid on any taxes not paid on or before the due date, so the imposition of interest was correct.  The Taxpayer’s protest was granted in part and denied in part.