Patrick J. Youngman



On October 20, 2000, the Department issued an assessment to the Taxpayer for personal income tax, penalty and interest for tax year 1999. At the hearing on his protest the Taxpayer raised the following arguments: (1) the Department failed to prove he is either a resident of New Mexico or a taxpayer; (2) both federal and state law prohibit the taxation of federal reserve notes; (3) the Department “dishonored” the private administrative proceeding he initiated against former Secretary John Chavez; (4) the Department “dishonored” his offer to discharge tax assessed; and (5) the Department failed to define the term “income”. Held: It is the Taxpayer’s burden to come forward with evidence to establish that the Department’s assessment is incorrect and the Taxpayer failed to do so in this case.  With regard to the Taxpayer’s legal issues, 31 USC 5154 specifically permits states to tax federal reserve notes, the state is not bound by a taxpayer’s attempt to initiate a “private” administrative proceeding against public officials, nor is the state bound by the terms of a taxpayer’s conditional offer to pay taxes due.  Protest denied.