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Johnny and Phuong Nguyen



The Taxpayer worked as a nail technician at a salon in New Mexico.  The Taxpayer was registered with the Department for gross receipts tax purposes.  All of the services rendered by the Taxpayer occurred at the salon.  The owner of the salon controlled the work and schedule of the salon, and issued regular paychecks.  The owner paid the Taxpayer commission and issued 1099s at the end of the tax year.  On March 1, 2013, the Department mailed a notice of limited scope audit commencement to the Taxpayer.  The Department also mailed a reminder notice and a notice of potential assessment.  No reply was ever received from the Taxpayer.  On May 30, 2013, the Department assessed the Taxpayer for gross receipts tax, penalty and interest for the tax period ending December 31, 2008.  The Taxpayer took steps to resolve the situation, including obtaining a nontaxable transaction certificate (NTTC) from his employer, but this NTTC was obtained approximately a month after the mandatory deadline.  On June 24, 2013, the Taxpayer filed a formal protest to the assessment.  At the hearing the Taxpayer, along with salon owner, who appeared as a witness, argued that the Taxpayer was an employee, rather than an independent contractor.  However, no evidence was presented that would indicate that the Taxpayer was not an independent contractor.  The Taxpayer’s protest was denied.