Did ongoing Department communications preserve a timely 2008 refund claim when no protest or lawsuit followed 120 days of agency inaction?

Plain-English summary

Josephine Miskowiec filed her original 2008 refund claim on time, but Department inaction started a second deadline that she did not preserve. Continued communications and requests for documents did not extend the 210-day period to protest or sue.

Miskowiec timely filed her original 2008, 2009, and 2010 personal income tax returns. In 2012, she learned that she qualified for an additional medical credit and filed amended returns for all three years on April 9.

The Department paid the 2009 and 2010 refunds. It requested additional documentation for 2008 but neither granted nor denied that claim within 120 days.

Miskowiec died on July 13, 2012. Her accountant and executor continued pursuing the 2008 refund, but gathering documents and responding became more difficult and time-consuming.

Inaction required a protest or lawsuit by day 210

The 120th day after the April 9 claim was August 7, 2012. Once the Department had taken no action by that date, Section 7-1-26 gave the taxpayer a choice: refile if the underlying limitation period remained open, or pursue an administrative protest or district-court action within 90 more days.

That made November 5, 2012—210 days after filing—the deadline to challenge the Department's inaction. No protest or lawsuit was filed by then.

The decision held that this failure prevented further action on the original claim. Reliance on Department communications did not excuse the missed deadline, and regulatory requests for more information did not count as agency action on the refund.

The refiled claim missed the outer refund deadline

The 2008 personal income tax payment was due April 15, 2009. The three-year refund period ended December 31, 2012.

The estate refiled the 2008 claim with supporting documents on February 20, 2013. Because that was after December 31, the Department also was statutorily barred from granting the refiled claim.

Result: protest DENIED. The 2008 personal income tax refund remained denied. The decision did not state the refund amount.

What this means for you

Taxpayers with pending refund claims

Calendar both the original refund limitation period and the separate inaction deadlines. A timely claim can still be lost if the Department does not act and the taxpayer misses the statutory protest-or-suit window.

Executors and estates

Death and document-gathering difficulties did not suspend the deadlines in this decision. Promptly identify pending claims and obtain professional help to preserve administrative or judicial remedies.

Tax professionals communicating with the Department

Do not treat correspondence or document requests as a formal grant or denial. The cited regulation said requests for additional information were not “action” for refund-deadline purposes.

Common questions

Q: Was the April 2012 refund claim timely?
A: Yes. The problem was the later failure to challenge Department inaction within 210 days.

Q: What happened after 120 days without a decision?
A: The taxpayer could refile while the general limitation period remained open or file a protest or lawsuit within the next 90 days.

Q: Did continued Department contact extend the deadline?
A: No. Communications and requests for documents did not toll the statutory period.

Q: Why couldn't the estate simply refile in February 2013?
A: The three-year deadline for a 2008 refund had expired on December 31, 2012.

Citations and references

Statute and regulation:

• NMSA 1978, § 7-1-26(B)-(D) — refund claims, Department inaction, protest or suit, and limitation period
• Regulation 3.1.9.9 NMAC — requests for information are not action on a refund claim

Case cited:

• In re Kilmer, 2004-NMCA-122 — statutory bar after failure to act within the refund-claim deadlines

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Josephine Miskowiec
• Decision PDF: D&O 14-22

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
JOSEPHINE MISKOWIEC, No. 14-22
TO THE DENIAL OF REFUND ISSUED UNDER
ID NO. L1585204688

DECISION AND ORDER

A formal hearing on the above-referenced protest was held April 23, 2014, before Dee Dee

Hoxie, Hearing Officer. The Taxation and Revenue Department (Department) was represented by Ms.

Elena Morgan, Staff Attorney. Ms. Sonya Varela, Auditor, also appeared on behalf of the

Department. Mr. Ural Decker, CPA appeared for the hearing and represented Ms. Josephine

Miskowiec (Taxpayer). Mr. Decker and Ms. Varela testified at the hearing. The Hearing Officer

took notice of all documents in the administrative file. Based on the evidence and arguments

presented, IT IS DECIDED AND ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. On February 5, 2014, the Department denied the Taxpayer’s request for refund for the 2008

tax year on personal income tax (PIT) because the statute of limitations had run.

2. On February 10, 2014, the Taxpayer filed a formal protest to the denial.

3. On April 1, 2014, the Department filed a Request for Hearing asking that the Taxpayer’s

protest be scheduled for a formal administrative hearing.

4. The Taxpayer filed timely PIT returns for the 2008, 2009, and 2010 tax years.

5. In 2012, the Taxpayer realized that she was eligible for an additional medical credit for those

tax years.

6. On April 9, 2012, the Taxpayer filed amended PIT returns for the 2008, 2009, and 2010 tax

years. The amended returns reflected the additional medical credit and claimed refunds for

each year.

7. The Taxpayer was refunded the amounts claimed for the 2009 and 2010 tax years. There was

some communication between the Department and the Taxpayer regarding additional

documentation on the 2008 tax year.

8. The Taxpayer died on July 13, 2012. The Taxpayer’s accountant and executor continued to

pursue the refund on behalf of her estate. However, responding to the Department and

finding the appropriate documents was more complicated and time-consuming.

9. No action was taken by the Department either granting or denying the refund for the 2008 tax

year by November 5, 2012.

10. On February 20, 2013, the Taxpayer refiled her claim for refund of the 2008 tax year with all

of the supporting documents that had been sent in previously.

11. The Department continued to communicate with the Taxpayer about the claim. The

Taxpayer again provided the documents requested.

12. The Taxpayer argues that the claim for refund was originally filed before the statute of

limitations expired. The Taxpayer argues that the Department’s continued communication

with the Taxpayer regarding the claim should have stayed the limitations period from

running.

DISCUSSION

The issue to be decided is whether the Taxpayer’s claim for refund for the 2008 tax year was

barred by the statute of limitations.

Statute of Limitations for Filing a Claim.

Josephine Miskowiec
Letter ID No. L1585204688
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All claims for refund must be filed within three years of the end of the calendar year in which

the payment was originally due. See NMSA 1978, § 7-1-26 (D). The Taxpayer’s PIT for 2008 was

due on April 15, 2009. Therefore, the final date on which to file a claim for refund would have been

December 31, 2012. The Taxpayer filed a timely claim for refund on April 9, 2012. However, the

claim was neither granted nor denied by August 7, 2012, which was 120 days from the date of the

claim.

Remedies for Inaction by the Department.

When a claim for refund is neither granted nor denied within 120 days of the date the claim

was filed, taxpayers have the option of refiling the claim or of pursuing a legal or administrative

remedy within 90 days of the 120th day, that is within 210 days of the date of the claim. See NMSA

1978, § 7-1-26 (B).

The Taxpayer refiled her claim on February 20, 2013. However, taxpayers may only refile

the claim if there is still time to do so under the statute of limitations. See NMSA 1978, § 7-1-26 (B)

and (D). The Taxpayer’s refiled claim was not timely.

Taxpayers may opt to file an administrative protest or a lawsuit in district court, and those

actions must be filed within 210 days of the date that the claim was filed. See NMSA 1978, § 7-1-26

(B) and (C). The Taxpayer failed to perfect her right to appeal the inaction by the Department by

November 5, 2012, which was 210 days from the filing of the claim on April 9, 2012.

The Taxpayer argues that the Department’s repeated communications with the Taxpayer

regarding the claim from the time it was filed in April 2012 to the denial in February 2014 should

have stayed the statute of limitations from running. The Taxpayer argues that there is such a rule for

federal tax claims and that New Mexico should follow the same rule. However, the statute

absolutely bars the Department from acting on a claim for refund that is more than 210 days old even

when the claim was originally filed within the statute of limitations. See In re Kilmer, 2004-NMCA-

Josephine Miskowiec
Letter ID No. L1585204688
page 3 of 5
122, 136 N.M. 440. It is incumbent on a taxpayer to file the protest or action in court within the 210-

day period. See id. at ¶ 1. A taxpayer’s failure to file a protest or an action within the 210-day period

is not excused by the taxpayer’s reliance on oral statements of an employee of the Department. See

id. at ¶ 45. Moreover, requests for additional information by the Department are not considered to be

“actions” for purposes of the statute. See 3.1.9.9 NMAC.

The claim for refund was filed on April 9, 2012. The Department neither granted nor

denied the refund by August 7, 2012, which was 120 days from the date of the claim. The Taxpayer

neither filed a protest nor an action in district court by November 5, 2012, which was 210 days from

the date of the claim. Therefore, the Taxpayer failed to perfect its right to appeal the inaction of the

Department on the original claim. Consequently, the Department is statutorily prohibited from acting

on the claim. See NMSA 1978, § 7-1-26 (B). See also Kilmer, 2004-NMCA-122. The Taxpayer

refiled her claim on February 20, 2013. However, the deadline to refile the claim was December 31,

2012. Therefore, the Department is statutorily prohibited from granting the claim. See NMSA 1978,

§ 7-1-26 (D).

CONCLUSIONS OF LAW

1. The Taxpayer filed a timely written protest to the denial of refund for the 2008 personal

income taxes, and jurisdiction lies over the parties and the subject matter of this protest.

2. The claim for refund was barred by the statute of limitations. Therefore, the claim

was properly denied.

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

DATED: June 10, 2014.

Dee Dee Hoxie
DEE DEE HOXIE
Hearing Officer
Taxation & Revenue Department
Josephine Miskowiec
Letter ID No. L1585204688
page 4 of 5
Post Office Box 630
Santa Fe, NM 87504-0630

Josephine Miskowiec
Letter ID No. L1585204688
page 5 of 5