In March 2000, the Taxpayer filed a 1999 New Mexico personal income tax return (PIT-1) along with a Schedule PIT-ADJ. The Taxpayer mistakenly claimed a deduction on the PIT-ADJ that is available to persons over the age of 65 whose adjusted gross income falls below a specified dollar amount. The Taxpayer took his completed forms to the Department’s Albuquerque Office to have them reviewed and to insure they were filled out correctly. He was told by a Department employee that everything appeared to be correct. As a result of the Department’s review, the Taxpayer filed the return as it was prepared. In August 2001, the Department issued an assessment to the Taxpayer for personal income tax, penalty and interest. The Taxpayer protested the assessment of penalty and interest for the following reasons: 1) the Department employee who reviewed his return failed to catch the error he made on 1999 PIT-ADJ and 2) it took the Department sixteen months to discover the Taxpayer’s error and issue an assessment. Held: The Taxpayer was misled by the Department employee who reviewed his 1999 PIT return and is entitled to an abatement of the penalty assessed against him. The Department’s assessment was issued within the statutory time limit set by the New Mexico Legislature and the taxpayer is liable for payment of interest on his late payment of 1999 personal income taxes. Protest granted in part and denied in part.