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In 1994, the Taxpayer worked as a mechanic for an auto repair business, and received a federal Form 1099 reporting his wages as nonemployee compensation.  The Taxpayer did not understand how to report this income, and his employer arranged to have the Taxpayer’s federal and state income tax returns prepared by its own accounting firm.  The federal return reported the Taxpayer’s compensation as business income on Schedule C to federal Form 1040.  In March 1998, the Department assessed the Taxpayer for gross receipts tax, penalty, and interest on the income reported on his 1994 Schedule C.  The Taxpayer protested the assessment, and the Department subsequently determined that the Taxpayer had performed services during 1994 as an employee and not as an independent contractor.  The Department told the Taxpayer it would abate the gross receipts tax assessment if the Taxpayer filed amended federal and state income tax returns to correct his reporting. When the Taxpayer attempted to do so, the IRS refused to accept his amended return because it was untimely.  Although New Mexico does not have a statute of limitations on the voluntary payment of additional tax due to the state, the Department refused to allow the Taxpayer to file an amended New Mexico return in the absence of a corresponding amendment to his federal return. Held:  Given the clear evidence that the Taxpayer’s 1994 income should have been reported as employee wages rather than as business income, it is well within the Department’s authority to accept the Taxpayer’s offer to amend his 1994 New Mexico income tax return and pay additional tax due to the state. The Department is ordered to accept the Taxpayer’s tender of additional tax due for 1994 tax year and, upon receipt of such payment, is ordered to abate its gross receipts tax assessment against the Taxpayer.