On January 6, 2016, The Department assessed the Taxpayer for International Registration Plan (IRP) penalty and interest for the tax reporting period ending December 31, 2014 and an assessment for International Fuel Tax Agreement (IFTA) for March 31, 2013 through December 31, 2013. On March 22, 2016 the Taxpayer filed an official timely protest. The issue to be decided in the protest is whether the Taxpayer is liable for the assessment of penalty, interest, and tax during the periods at issue for IFTA and IRP. The Taxpayer argued for a reduction of tax, penalties, and interest since the original paperwork was located and provided to the Department. During the time at issue the Taxpayer had a home base in Hobbs, New Mexico and several vehicles which travel within Texas and New Mexico. The Taxpayer is subject to reporting and record-keeping requirements of IRP and IFTA. During the time of the original request for records the Taxpayer was unable to locate them as his prior bookkeeper had left for another job and the business was in the process of relocating. The Taxpayer testified that as documentation was located he would send it in to the Department. The Department shows record of receiving documents for April, May, and June of 2013 and with that information the Department was able to update the amount of tax, penalty, and interest owed. The Taxpayer was able to locate the remaining documents and provided that at the time of the hearing. The Taxpayer argued that there should be a further reduction in tax, penalty, and interest owed. During the protest the hearing officer determined that the correct audit procedure was used by the Department, that the assessment of penalty under the IRP and IFTA were justified, the misplacing of records by the Taxpayer was an isolated case, and that the Taxpayer provided evidence of reasonable cause to waive the assessment of IFTA penalties. For the reasons above, the Taxpayer’s protest is denied in part and granted in part. The Taxpayer is ordered to pay the IRP assessment of penalty and the tax and interest for the IFTA assessment.
Hydrotech Services, LLC