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Estate of Richard and Diane Shoudt



On May 15, 2017, the Department filed a Notice of Claim of Lien against the Taxpayers for a total of $29,776.04 for CRS taxes owed. On August 1, 2017, the Taxpayer filed a formal protest letter. The issue to be decided in the protest was whether the Department followed the requirements set out in law when it filed the lien against the Taxpayers. In July of 2012, the Department issued 42 assessments for gross receipts tax to a business called Special Events Marketing Tal. Richard Shoudt, who is now deceased, was registered as the owner of the business, but no name appeared on the assessments other than the name of the business. The Department argued that since the business was registered by the individual later named in the lien this sufficiently followed procedure for filing the lien. The Department understood this individual to be the sole proprietor of the business and responsible for the liability. The Hearing Officer, however, disagreed, explaining that the requirements to file a lien are detailed carefully in the statutes. The notice of lien must identify the taxpayer who is liable, must identify the dates that the tax became due, and must state that New Mexico claims a lien for the amount due on an assessment. Section 7-1-3 NMSA 1978 states that the lien be issued to “a person to whom an assessment has been made.” This was not done in this case. The assessments were issued to a business which showed a CRS number but no name. Carefully identifying the Taxpayer, the Hearing Officer said, is an important and necessary step before the Department may pursue collection. An assessment provides a procedural safeguard to Taxpayers and allows them to protest. Since this was done in this case, the Hearing Officer order the lien released and the protest was granted.