The taxpayer filed a timely 1995 PIT return showing a prepayment of $1,321 and tax due of $791, which he paid by check. The Department did not have any record of the prepayment. In June 1996, the Department’s Legacy computer system generated Assessment No. 662226 against the taxpayer for the prepayment amount. In 2003, the Department intercepted the taxpayer’s 2002 personal income tax refund and applied it to the liability shown on Assessment No. 662226. The taxpayer filed a protest, saying he never received Assessment No. 662226. When a mailing is challenged, proof of receipt of the mailing is not required, but the Department is required to show that the item in question was mailed. At the formal hearing, the Department failed to present sufficient evidence to meet its burden of proof that Assessment No. 662226 was mailed to the taxpayer. Without proof of mailing, the assessment was not valid under NMSA 1978, § 7-1-17. The taxpayer’s protest was granted, and the Department was ordered to refund the $519 of personal income tax due to the taxpayer for tax year 2002, with interest as provided in NMSA 1978, § 7-1-68.
Ernest I. Aragon