The Taxpayers were residents of New Mexico in 2001. They filed their joint Personal Income Tax (PIT) return by mail on October 15, 2002. The Department determined that the Taxpayers were non-filers for the 2001 and 2003 tax years. On June 13, 2008, the Department notified the Taxpayers of a limited scope audit for PIT for those two tax years. The Department then located a payment for 2003 in their database and eliminated that year from the audit. The Department assessed the Taxpayers for personal income tax, penalty and interest for the 2001 tax year. The Taxpayers filed a formal written protest to this assessment stating that they had filed the return in question and submitted the necessary payment. At the hearing, the Taxpayers presented evidence, both by affidavit and testimony, that they filed their PIT return for the 2001 tax year. The Department was not able to provide evidence that the return was not received. The Department also stated that they were in the midst of changing its database in October 2002, the same month that the Taxpayers filed their return. The Taxpayers argued that it was likely a mistake could have been made in processing their return. The hearing officer determined that the Taxpayers presented sufficient evidence to show that they filed their 2001 PIT return in October 2002. The Taxpayer’s protest was granted.
Shane and Kim McGrew