Could a taxpayer contest a 1999 New Mexico income-tax residency assessment through mailed statements and documents after moving to New York and not appearing at the scheduled hearing?

Plain-English summary

Nicholas J. Drobot effectively abandoned his income-tax protest by not appearing at the administrative hearing in person or through an authorized representative. His mailed statements and documents could not prove his contested 1999 residency because they were unsworn, untested by cross-examination, and unauthenticated.

The Department assessed $825.00 of 1999 personal income tax, $443.44 of interest, and $82.50 of penalty.

Drobot timely protested. The first hearing was postponed at his request because he worked as a tax preparer and the scheduled April date fell during his busy season.

Discovery disputes caused another postponement. After Drobot supplied supplemental interrogatory answers, the hearing officer offered a date range from July 19 through August 13 and asked about unavailable dates. Drobot requested a date as late as possible within that range.

The hearing was set for August 12, and Drobot signed for the certified notice in June. A week before the hearing, the hearing officer received his letter saying he had moved back to New York and could not attend. He asked for a decision based on enclosed documents instead.

Written submissions did not replace testimony

Administrative tax hearings were quasi-judicial proceedings requiring a fair opportunity to present and cross-examine witnesses.

Section 7-1-24(F) relaxed technical evidence rules but allowed the hearing officer to require reasonable substantiation when a statement or record's truth or accuracy was reasonably doubtful.

The Department disputed Drobot's claim that he was not a New Mexico resident in 1999. His written statements were not under oath and could not be cross-examined, and the authenticity of his documents could not be verified.

The hearing officer therefore declined to rely on those materials. Without admissible, reliable evidence, Drobot did not overcome the presumption of correctness under Section 7-1-17.

Nonappearance abandoned the protest

Drobot had been warned from the outset that witnesses had to attend, testify under oath or affirmation, and answer questions from both sides.

He also had an opportunity to identify scheduling problems but instead requested the latest available date. He never asked to move the hearing earlier to accommodate his relocation.

Section 7-1-16(C) provided that a protesting taxpayer became delinquent upon failing to appear personally or through an authorized representative at the scheduled hearing. The decision treated that failure as forfeiting the right to contest the assessment.

Result: protest DENIED. The assessment remained in place without a merits ruling on the residency claim.

What this means for you

Taxpayers disputing residency

Plan to authenticate documents and give sworn testimony that can be cross-examined. Informal written assertions may not carry the required evidentiary weight.

Taxpayers who move during a protest

Notify the hearing office promptly and request a scheduling adjustment or arrange an authorized representative. A move does not automatically excuse attendance.

Taxpayers responding to a hearing notice

Treat appearance as essential. Under the statute applied here, failing to appear abandoned the protest regardless of earlier written submissions.

Taxpayers submitting documents

Be prepared to establish authenticity and explain how each record proves the disputed fact.

Common questions

Q: What was Drobot disputing?
A: A 1999 personal income tax assessment involving the Department's contested assertion that he was a New Mexico resident.

Q: Did he receive notice of the August hearing?
A: Yes. He signed for the certified notice on June 18, 2004.

Q: Why were his mailed statements rejected?
A: They were unsworn, not subject to cross-examination, and disputed by the Department.

Q: Why were the documents insufficient?
A: Their authenticity could not be verified without his appearance and testimony.

Q: Did the decision resolve whether he was actually a resident?
A: No. It denied the protest because he failed to appear and meet his burden.

Citations and references

Statutes:

• NMSA 1978, § 7-1-16(C) — failure to appear at a protest hearing
• NMSA 1978, § 7-1-17 — presumption that an assessment is correct
• NMSA 1978, § 7-1-24(F) — evidence and substantiation in tax hearings

Case cited:

• State ex rel. Battershell v. City of Albuquerque, 108 N.M. 658, 777 P.2d 386 (Ct. App. 1989)

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Nicholas J. Drobot
• Decision PDF: D&O 04-11

Original ruling text

BEFORE THE HEARING OFFICER
OF THE TAXATION AND REVENUE DEPARTMENT
OF THE STATE OF NEW MEXICO

IN THE MATTER OF THE PROTEST OF
NICHOLAS J. DROBOT No. 04-11
ASSESSMENT OF 1999 PERSONAL INCOME
TAX ISSUED UNDER LETTER ID L1238034432

DECISION AND ORDER

A formal hearing on the above-referenced protest was held on August 12, 2004, before

Margaret B. Alcock, Hearing Officer. The Taxation and Revenue Department ("Department")

was represented by Bruce J. Fort, Special Assistant Attorney General. Nicholas J. Drobot

(“Taxpayer”) did not appear for the hearing. Based on the evidence and arguments presented, IT

IS DECIDED AND ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. On November 19, 2003, the Department assessed the Taxpayer for $825.00 of

personal income tax due for the 1999 tax year, plus $443.44 of interest and $82.50 of penalty.

2. On December 10, 2003, after obtaining an extension of time from the Department,

the Taxpayer filed a written protest to the Department’s assessment.

3. On February 2, 2004, Bruce Fort, the Department’s attorney, filed a Request for

Hearing asking that the Taxpayer’s protest be scheduled for a formal administrative hearing.

4. On February 3, 2004, a Notice of Hearing was sent to the parties scheduling an

administrative hearing for April 8, 2004.

5. Enclosed with the hearing notice was an information sheet explaining the

administrative hearing process. The information sheet included the following passage:
The taxpayer may need to call witnesses to testify concerning...facts of
the case. The taxpayer may also testify on his or her own behalf. The
Department’s attorney may call witnesses, including the taxpayer, to
establish the Department’s case. All witnesses are required to be present
at the hearing, to testify under oath or affirmation, and to answer
questions from both the taxpayer and the Department’s attorney.

6. On February 10, 2004, the Taxpayer filed an unopposed request for continuance,

explaining that he was employed as a tax preparer and that April 8, 2004 would be one of his

busiest days.

7. On February 16, 2004, the Hearing Officer entered an Order granting the

Taxpayer’s motion and rescheduling the administrative hearing for April 27, 2004

8. On April 5, 2004, the Department’s attorney filed a Motion to Compel Discovery,

asking the Hearing Officer to require the Taxpayer to respond to the Department’s First Set of

Interrogatories and Request for Production, which were served on the Taxpayer on February 6,

2004.

9. On April 6, 2004, the Hearing Officer sent a letter to the parties vacating the April

27, 2004 hearing and ordering the Taxpayer to respond to the Department’s discovery requests

no later than May 7, 2004.

10. On April 20, 2004, the Taxpayer sent the Hearing Officer a letter stating that he

had never received the Department’s First Set of Interrogatories and Request for Production.

11. On April 21, 2004, the Hearing Officer sent a letter to the parties directing the

Department’s attorney to send the Taxpayer another copy of the Department’s discovery requests

and extending the time for the Taxpayer to respond to those requests until May 28, 2004

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12. On April 27, 2004, the Taxpayer filed his responses to the Department’s

interrogatories. The Taxpayer declined to fully answer Interrogatories 1, 2, 6, and 12, objecting

to those questions as irrelevant.

13. On May 14, 2004, the Department filed its response to the Taxpayer’s objections.

14. On May 17, 2004, the Hearing Officer issued a letter ruling finding that the

information sought by the Department was relevant to the Taxpayer’s protest and ordering the

Taxpayer to supplement his answers to the interrogatories by June 11, 2004.

15. The Hearing Officer informed the parties that after the supplemental answers were

filed, she would reschedule the hearing on the protest, stating: “I anticipate setting a hearing

sometime between July 19th and August 13th. If there are any dates during this period when

either party (or required witnesses) will be unavailable, please let me know.”

16. On June 8, 2004, the Taxpayer mailed supplemental answers to interrogatories in

compliance with the Hearing Officer’s order. With regard to the time frame for rescheduling the

administrative hearing, the Taxpayer stated: “Based on ever changing schedules and availability,

I suggest a hearing date as late as possible in August within your anticipated range.”

17. On June 17, 2004, the Hearing Officer issued a Notice of Administrative Hearing

rescheduling the hearing on the Taxpayer’s protest for August 12, 2004.

18. The June 17, 2004 hearing notice was sent to the Taxpayer by certified mail,

return receipt requested, and was signed for by the Taxpayer on June 18, 2004.

19. On August 5, 2004, the Hearing Officer received a letter from the Taxpayer

stating that he would be “unable to attend the Administrative Hearing set for August 12, 2004”

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because he had moved back to the State of New York. The envelope was postmarked in

Windsor, New York, on July 31, 2004.

20. The Taxpayer’s letter included various documents which the Taxpayer asked the

Hearing Officer to consider in making a decision on the Taxpayer’s protest.

21. On August 12, 2004 at 9:00 a.m., the Department’s attorney entered his

appearance at the scheduled hearing on the Taxpayer’s protest. The Taxpayer did not appear for

the hearing.

DISCUSSION

NMSA 1978, § 7-1-17 provides that any assessment of taxes made by the Department is

presumed to be correct, and it is the Taxpayer’s burden to come forward with evidence and legal

argument to establish that he is entitled to an abatement.

In this case, the information sheet the Hearing Officer sent to the Taxpayer on February 3,

2004 notified him that all witnesses “are required to be present at the hearing, to testify under

oath or affirmation, and to answer questions from both the taxpayer and the Department’s

attorney.” Before rescheduling the hearing after discovery was completed, the Hearing Officer

solicited the parties’ input, stating: “I anticipate setting a hearing sometime between July 19th

and August 13th. If there are any dates during this period when either party (or required

witnesses) will be unavailable, please let me know.” (emphasis added.). On June 8, 2004, the

Taxpayer responded: “I suggest a hearing date as late as possible in August within your

anticipated range.” Based on this response, the Hearing Officer rescheduled the hearing for

August 12, 2004. The Taxpayer gave no indication that he was planning to leave the state, nor

did he ever ask the Hearing Officer to move up the date of the hearing to accommodate his move

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to New York. Instead, the Taxpayer sent a letter to the Hearing Officer after the fact, stating that

he would be “unable to attend the Administrative Hearing set for August 12, 2004.”

Administrative tax hearings are quasi-judicial proceedings. Although such hearings are

not required to observe the same evidentiary standards applied by a court, the proceedings must

adhere to fundamental principles of justice and procedural due process, including an opportunity

for the parties to present and cross-examine witnesses. See, State ex rel. Battershell v. City of

Albuquerque, 108 N.M. 658, 777 P.2d 386 (Ct. App. 1989). NMSA 1978, § 7-1-24 of the Tax

Administration Act, provides that:

F. In hearings before the hearing officer, the technical rules of evidence
shall not apply, but in ruling on the admissibility of evidence, the hearing
officer may require reasonable substantiation of statements or records
tendered, the accuracy or truth of which is in reasonable doubt.

The Taxpayer’s July 31, 2004 letter asked the Hearing Officer to decide his case based on various

statements and documents he had provided during the course of the protest. The Department has

not stipulated to any of these statements, however, and continues to challenge the Taxpayer’s

assertion that he was not a New Mexico resident during 1999. Because the Taxpayer’s

statements were not given under oath, were not subject to cross-examination by the Department’s

attorney, and were not stipulated to by the Department, they do not have sufficient indicia of

reliability to be considered by the Hearing Officer. The same applies to the various documents

provided by the Taxpayer, the authenticity of which cannot be verified. As a result, the Taxpayer

has failed to meet his burden of proof under NMSA 1978, § 7-1-17.

NMSA 1978, § 7-1-16(C) specifies that a taxpayer who files a protest to a Department

assessment “nevertheless becomes a delinquent taxpayer upon failure of the taxpayer to appear,

in person or by authorized representative, at the hearing set” to consider his protest. This

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establishes that a taxpayer who elects not to appear for the administrative hearing provided by the

Department effectively abandons his protest and forfeits his right to contest his liability for the

assessment.

CONCLUSIONS OF LAW

1. The Taxpayer filed a timely, written protest to the assessment of personal income

tax issued under Letter ID L1238034432, and jurisdiction lies over the parties and the subject

matter of this protest.

2. By failing to appear at the administrative hearing to present evidence and legal

argument in support of his protest, the Taxpayer failed to meet his burden of proof in this matter

and effectively abandoned his protest.

For the foregoing reasons, the Taxpayer's protest IS DENIED.

DATED August 17, 2004.

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