Mark S. Welsh



The taxpayer underreported his income on his 1999 New Mexico personal income tax return.  Due to computer problems, the Department did not run a tape match with IRS records for the 1999 tax year until February 2003. In August 2003, based on the tape match information, the Department assessed the taxpayer for underpaid tax, plus penalty and interest. The taxpayer protested the interest accrued after October, 2000, arguing that the Department was at fault for not running the tape match and discovering his reporting error by that time.  The hearing officer noted that it is the obligation of taxpayers, who have the most accurate and direct knowledge of their activities, to determine their tax liabilities and accurately report those liabilities to the state.  The hearing officer found that the interest was properly assessed under Section 7-1-67 NMSA 1978 and the protest was denied.