Was Reggie Olguin's assessment protest timely when he mailed it before the deadline but used the wrong Department address and it was never received?

Plain-English summary

Reggie Olguin's protest was untimely even though he prepared and mailed it before the deadline, because he used the wrong address and the Department never received it. The AHO upheld the denial without deciding whether the underlying $11,828.35 gross receipts tax, penalty, and interest assessment was substantively correct.

The Department mailed the assessment on October 27, 2015, making January 25, 2016 the end of the 90-day protest period. Its enclosed FYI-402 listed a post-office-box mailing address and a separate St. Francis Drive address for private courier delivery.

The envelope combined parts of two different addresses

Olguin prepared a protest on January 11. But he transposed the address information and sent it to “P.O. Box 1100, Santa Fe, NM 87505,” which was not a Department address. The Department had no record of receiving it, and there was no evidence that any agency employee or bureau received it before the deadline.

Olguin called on January 26 to ask about the protest. After learning it had not arrived, he emailed a copy on January 28—the first time the Department received his protest letter.

Mailing before the deadline was not enough

Section 7-1-9(B) and Regulation 3.1.4.10(C)(2) governed timely filings by mail. The regulation said that if a mailing is not received, its contents are not timely, and an improperly addressed envelope does not become timely based on its postmark.

Because the January 11 envelope was wrongly addressed and never received, it could not count as a timely filing. The emailed copy arrived three days after the statutory period expired.

The deadline was jurisdictional

Section 7-1-24 required the protest within 90 days of the Department's mailing or personal service of the assessment. Once January 25 passed, Regulation 3.1.7.11 left the Department without authority to consider the late submission.

Result: protest DENIED. The Department properly rejected the challenge as untimely; the decision did not reach the assessment merits.

Findings 9-11 in the extracted decision date the assessment printing and mailing as October 27, 2016, but the assessment was dated October 26, 2015, the discussion expressly finds mailing on October 27, 2015, and the stated deadline was January 25, 2016. This page follows the discussion's internally consistent 2015 mailing date and preserves the original wording below.

What this means for you

Taxpayers filing by mail

Use the exact address designated for the delivery method. A timely postmark may not protect a filing sent to an incorrect address and never received.

Taxpayers near a deadline

Retain proof showing the address, postmark, and contents, and confirm receipt promptly. If permitted, use a delivery method that supplies reliable tracking or receipt evidence.

Representatives reviewing a rejected protest

Separate the timeliness dispute from the tax merits. If the statutory deadline is jurisdictional, the agency may be unable to consider the underlying assessment at all.

Common questions

Q: Did Olguin mail something before the deadline?
A: Yes. He prepared a January 11 protest, but addressed the envelope incorrectly.

Q: Did the Department receive that mailing?
A: No. The record showed no Department receipt.

Q: Was the January 11 postmark enough?
A: No. The cited regulation did not treat an unreceived, improperly addressed mailing as timely.

Q: When did the Department first receive the protest letter?
A: January 28, 2016, by email—after the January 25 deadline.

Q: Did the AHO decide whether the assessment amount was correct?
A: No. It decided only that the protest was untimely and outside the Department's authority to hear.

Citations and references

Statutes and regulations:

• NMSA 1978, §§ 7-1-17 and 7-1-24 — assessment effectiveness and mandatory 90-day protest deadline
• NMSA 1978, § 7-1-9(B) — filing by mail
• Regulation 3.1.4.10(C)(2) NMAC — unreceived and improperly addressed mail
• Regulation 3.1.7.11 NMAC — jurisdictional protest deadline
• Regulations 3.1.6.11(A) and 3.1.6.12 NMAC — effective assessment and presumption of correctness

Cases cited:

• Associated Petroleum Transport v. Shepard, 1949-NMSC-002 — failure to follow the statutory protest procedure deprived the agency of jurisdiction
• Chan v. Montoya, 2011-NMCA-072 — statutory filing deadlines enforced in property-tax refund litigation
• Lopez v. New Mexico Department of Taxation & Revenue, 1997-NMCA-115 — untimely administrative tax protest
• Marbob Energy Corp. v. New Mexico Oil Conservation Commission, 2009-NMSC-013 — mandatory meaning of “shall”

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Reggie Olguin
• Decision PDF: D&O 16-19

Original ruling text

STATE OF NEW MEXICO
ADMINISTRATIVE HEARINGS OFFICE
TAX ADMINISTRATION ACT

IN THE MATTER OF THE PROTEST OF
REGGIE OLGUIN No. 16-19
TO DENIAL OF PROTEST ISSUED UNDER LETTER
ID NO. L1832727088

DECISION AND ORDER

A protest hearing occurred on the above captioned matter May 10, 2016 before Brian

VanDenzen, Esq., Chief Hearing Officer, in Santa Fe. At the hearing, Reggie Olguin

(“Taxpayer”) appeared pro se. Staff Attorney Marek Grabowski appeared representing the State

of New Mexico Taxation and Revenue Department (“Department”). Protest Auditor Veronica

Galewaler appeared as a witness for the Department. Department Exhibits A-F were admitted

into the record. The undersigned hearing officer, without objection of the parties during the

hearing, takes administrative notice of Department FYI-402, a copy of which is being included in

the record. Based on the evidence and arguments presented, IT IS DECIDED AND ORDERED

AS FOLLOWS:

FINDINGS OF FACT

1. On February 3, 2016, under letter id. no. L1832727088, the Department denied

Taxpayer’s January 28, 2016 submission of the protest letter originally dated on January 11,

2016 as untimely.

2. On March 4, 2016, Taxpayer submitted a formal protest of the Department’s

denial of protest via facsimile.

3. On March 10, 2016, the Department acknowledged receipt of a valid protest to its

denial of protest.

4. On March 30, 2016, the Department filed a request for hearing in this matter with

the Administrative Hearings Office, a separate agency from the Department.

5. On March 31, 2016, the Administrative Hearings Office sent Notice of

Administrative Hearing, setting this matter for a merits hearing on May 10, 2016.

6. The May 10, 2016 hearing occurred within 90-days of the Department’s

acknowledgement of receipt of a valid protest.

7. On October 26, 2015, through letter id. no. L0496396336, the Department

assessed Taxpayer for outstanding gross receipts tax, penalty and interest totaling $11,828.35 for

the CRS reporting periods from January 1, 2008 through January 31, 2011.

8. The Department created and dated the underlying assessment on October 26,

9. [Dept. Ex A].

10. The Department printed the underlying assessment on October 27, 2016 as part of

a batch of documents. [Dept. Ex. A].

10. The Department mailed the batch of printed documents containing the underlying

assessment via first class USPS mail on October 27, 2016. [Dept. Ex. D].

11. 90-days from the Department’s October 27, 2016 mailing of the Notice of

Assessment was January 25, 2016.

12. Included with the Department’s Notice of Assessment was an FYI-402, titled

“Taxpayer Remedies” that explained Taxpayer’s ability to protest the assessment. That document

lists the Department’s address for the filing of protests by mail as P.O. Box 1671, Santa Fe, NM

87504-1671 or a physical address for private courier delivery as 1100 St. Francis Drive, Suite

1100, Santa Fe, NM 87507. [Administrative Notice, FYI-402, admitted without objection; Dept.

Ex. A].

In the Matter of the Protest of Reggie Olguin , page 2 of 9

13. On January 11, 2016, Taxpayer prepared a protest letter to challenge the

Department’s assessment. However, when addressing the envelope, Taxpayer inadvertently

transposed the P.O. Box information with the street address provided on FYI-402, resulting in

Taxpayer sending the protest to the incorrect address of P.O. Box 1100, Santa Fe, NM 87505.

[Dept. Ex. F].

14. P.O. Box 1100, Santa Fe, NM 87505 is not a correct address for the Department

and the Department has no record of receiving Taxpayer’s January 11, 2016 mailing.

15. Although Taxpayer speculated that any mailing to a Santa Fe address (even in

incorrect address) with “Taxation and Revenue Department” noted as the recipient should get to

the Department, there is no evidence to support that assertion and no evidence that any person or

any bureau of the agency received the protest letter by the 90-day deadline.

16. Taxpayer never received a copy of his January 11, 2016 mailing back from the

postal service

17. On January 26, 2016, Taxpayer called the Department’s protest office to inquire

about the status of his protest.

18. After exchanging voicemails, on January 27, 2016, Taxpayer spoke with Protest

Auditor Andrea Umpleby about the status of his protest. Ms. Umpleby told Taxpayer that the

Department had not received any protest in his case and directed Taxpayer to submit anything he

had related to the protest via email to the Department for review. [Contact Log of Andrea

Umpleby and Taxpayer testimony at hearing].

19. On January 28, 2016, Taxpayer emailed a copy of his January 11, 2016 protest

letter to Ms. Umpleby, which was the first time the Department received any letter from

Taxpayer after its Notice of Assessment.

In the Matter of the Protest of Reggie Olguin , page 3 of 9
DISCUSSION

This case involves the straightforward issue of whether Taxpayer timely protested the

underlying assessment and whether the Department has jurisdiction to entertain a protest not

timely received due to Taxpayer’s inadvertent error.

While the Department receives a statutory presumption of correctness to its assessments

under NMSA 1978, § 7-1-17 (2007), conceptually such a presumption of correctness can only

attach upon a mailed or personally delivered legally effective Notice of Assessment. See NMSA

1978, § 7-1-17 (B) & (C) (2007) and Regulation 3.1.6.11(A) NMAC. See also Torridge Corp. v.

Commissioner of Revenue, 172-NMCA-171, ¶13, 84 N.M. 610 (“after…notice of assessment of

taxes is delivered to a taxpayer, taxpayer must carry burden of proof in order to negate the

presumption of correctness.”). The Department’s Notice of Assessment in this case was dated on

October 26, 2015. The Department introduced evidence related to the mailing of that Notice of

Assessment1, which established by the preponderance that the Department mailed Taxpayer the

document entitled “Notice of Assessment” on October 27, 2015 despite the October 26, 2015 date

on the face of the letter. On October 27, 2015, when the Department mailed the Notice of

Assessment, it became effective under Section 7-1-17 (B) (2) (Notice of Assessment effective when

it “is mailed or delivered in person.”).

Once the Department properly mailed the assessment on October 27, 2015, under Section

7-1-17 (C) that assessment is presumed correct. Consequently, Taxpayer has the burden to

overcome the assessment. See Archuleta v. O'Cheskey, 1972-NMCA-165, ¶11, 84 N.M. 428.

Accordingly, it is Taxpayer’s burden to present some countervailing evidence or legal argument

1
See In the Matter of the Protest of Club 33, Inc., Decision and Order No. 12-13 (non-precedential), another similar
case dealing with an allegation that a taxpayer missed the deadline to protest by a matter of days. In that case, unlike
here, the Department did not establish a date of mailing of its assessment. In cases where a party is alleging a
dispositional jurisdictional default involving a matter of a day or two, it is important for that party to establish the
triggering action for the jurisdictional period, like the Department did in this case.

In the Matter of the Protest of Reggie Olguin , page 4 of 9
to show that it is entitled to an abatement, in full or in part, of the assessments issued against

him. See N.M. Taxation & Revenue Dep't v. Casias Trucking, 2014-NMCA-099, ¶8.

“Unsubstantiated statements that the assessment is incorrect cannot overcome the presumption of

correctness." See MPC Ltd. v. N.M. Taxation & Revenue Dep't, 2003 NMCA 21, ¶13, 133 N.M.

217; See also Regulation 3.1.6.12 NMAC.

In order to challenge the Notice of Assessment, Taxpayer needed to file a written protest

with the Department’s secretary. See NMSA 1978, Section 7-1-24 (2015). In pertinent part under

Section 7-1-24 (C) (emphasis added), such protest “shall be filed within ninety days of the date

of the mailing to or service upon the taxpayer by the department…” Regarding interpreting the

“or” provision of this section, this section must be read in conjunction with Section 7-1-17 (B)

(2), which defines the assessment as effective upon mailing or delivery in person. See State v.

Trujillo, 2009-NMSC-012, ¶22, 146 NM 14 and Hayes v. Hagemeier, 1963-NMSC-095, ¶9, 75

N.M. 70 (Statutes are to be read in harmony with other provisions of the law dealing with the

same subject matter). In conjunction with the two options the Department has to issue an

effective assessment under Section 7-1-17 (B), Section 7-1-24 (C) requires a taxpayer to file

their protest within 90-days of the Department’s mailing if that is the method of service the

Department used or within 90-days of the Department’s personal delivery if the Department used

that method. In either case, Section 7-1-24 (C)’s use of the word “shall” makes it an absolute

requirement that a taxpayer file a protest within 90-days. See Marbob Energy Corp. v. N.M. Oil

Conservation Comm'n, 2009-NMSC-013, ¶22, 146 N.M. 24 (use of the word “shall” in a statute

indicates provision is mandatory absent clear indication to the contrary). Accordingly, Department

Regulation 3.1.7.11 NMAC finds that the 90-day protest period is jurisdictional. Department

regulations interpreting a statute are presumed proper and are to be given substantial weight. See

In the Matter of the Protest of Reggie Olguin , page 5 of 9
Chevron U.S.A., Inc. v. State ex rel. Dep't of Taxation & Revenue, 2006-NMCA-50, ¶16, 139 N.M.

498.

Case law further affirms this approach. In Associated Petroleum Transp. v. Shepard,

1949-NMSC-002, ¶6 & ¶11, 53 N.M. 52, the New Mexico Supreme Court noted that a

taxpayer’s inability to timely follow the then-in-place designated protest procedure deprived the

State Tax Commission of jurisdiction over the protest. More recently, the New Mexico Court of

Appeals ordered the dismissal of a property tax taxpayer’s complaints for refund when such

complaints were not timely filed in compliance with the Legislature’s statutorily imposed

deadlines. See Chan v. Montoya, 2011-NMCA-72, 150 N.M. 44. In Lopez v. New Mexico Dep't

of Taxation & Revenue, 1997-NMCA-115, 124 N.M. 270, the Court of Appeals had opportunity

to consider whether a taxpayer timely and properly filed a protest against the Department’s

notice of audit. At the administrative tax protest hearing, the tax hearing officer found that the

Lopez taxpayer had failed to timely protest the Department’s audit under Section 7-1-24 (which

then required a protest within 30-days rather than 90-days under the current statute). See id., ¶6.

The Court of Appeals in Lopez noted that Section 7-1-24 imposed a 30-day time restriction on a

protest. See id., ¶6. The Court of Appeals in Lopez affirmed that hearing officer’s conclusion that

the Lopez taxpayer did not timely protest the Department’s audit. See id., ¶9.

In this case, applying this 90-day period to protest, Taxpayer had until January 25, 2016

to file a protest with the Department’s secretary. Taxpayer attempted to file a protest within that

timeframe, but because of inadvertent error in addressing the envelope incorrectly, the

Department never received Taxpayer’s protest. The question is whether this failed mailing

amounts to a timely protest?

Generally, under the Tax Administration Act, any required filing is timely if mailed on or

before the deadline. See NMSA 1978, Section 7-1-9 (B) (1997). Section 7-1-9 (B) grants the

In the Matter of the Protest of Reggie Olguin , page 6 of 9
Department the specific authority to promulgate regulations regarding what constitutes timely

filing and adequacy of postmarks. In accord with that provision, Regulation 3.1.4.10 (C) NMAC

addresses the determination of timeliness. Again, the regulations are presumed proper and are to

be given substantial weight. See Chevron U.S.A., Inc., 2006-NMCA-50, ¶16. Relevant to this case

is Regulation 3.1.4.10 (C) (2) NMAC, which states that

[i]f a mailing is not received by the department, the contents of the mailing
are not timely. If an envelope is improperly addressed and is returned to
the sender by the post office, there has been no timely mailing within the
meaning of the statute. The postmark date on the improperly addressed
envelope will not be deemed the date of receipt by the department.

Here, although certainly inadvertent, Taxpayer acknowledges that the envelope

containing his January 11, 2016 Protest was not properly addressed to the Department. The

Department provided Taxpayer with the FYI-402 explaining the protest process. In that form, the

Department clearly provided a mailing address and a physical address for submission of protest

letters. Despite being provided with the clear address information by the Department, Taxpayer

mistakenly transposed the number of the physical address with the P.O. Box number on the

envelope. The Department has no record that it ever received Taxpayer’s mailing. Taxpayer’s

speculative questioning about what the post office might have done with the incorrectly

addressed envelope is insufficient to establish that the Department in fact received the letter or to

overcome the presumption of correctness. Since the mailed protest was not properly addressed

and never received by the Department, the mailing of that protest letter could not be deemed

timely under Regulation 3.1.4.10 (c) (2) NMAC, Section 7-1-9 (B), or Section 7-1-24.

The only other potential protest submitted in this case is the copy of the January 11th

letter that Taxpayer submitted to the Department on January 28, 2016. However, this document

was not submitted until after the 90-day period for protest under Section 7-1-24 (C) had lapsed

on January 25, 2016. After January 25, 2016, the Department lacked jurisdiction to entertain the

In the Matter of the Protest of Reggie Olguin , page 7 of 9
protest. See Regulation 3.1.7.11 NMAC. In light of Section 7-1-24 (C)’s mandatory 90-day

requirement, Regulation 3.1.7.11 NMAC, Associated Petroleum Transp and Lopez, Taxpayer’s

protest filed with the Department after the 90-day deadline cannot be accepted as a valid protest

in this case.

CONCLUSIONS OF LAW

A. Taxpayer filed a timely, written protest to the Department’s denial of protest, and

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

B. The hearing was timely set and held within 90-days of the Department’s

acknowledgment of receipt of a valid protest under NMSA 1978, Section 7-1B-8 (2015).

C. Taxpayer’s January 11, 2016 letter containing his protest was improperly addressed

and not received by the Department, meaning that the mailing of that protest letter could not be

deemed timely under Regulation 3.1.4.10 (c) (2) NMAC, NMSA 1978, Section 7-1-9 (B) (1997),

or NMSA 1978, Section 7-1-24 (2015).

D. Taxpayer’s failure to timely submit a protest letter by January 25, 2016, within the

90-day jurisdictional limit articulated under NMSA 1978, Section 7-1-24 (C) (2015), deprived the

Department of authority to consider Taxpayer’s January 28, 2016 submission of the protest letter.

See Associated Petroleum Transp. v. Shepard, 1949-NMSC-002, ¶6 & ¶11, 53 N.M. 52; See also

Chan v. Montoya, 2011-NMCA-72, 150 N.M. 44; See also Lopez v. New Mexico Dep't of

Taxation & Revenue, 1997-NMCA-115, 124 N.M. 270.

In the Matter of the Protest of Reggie Olguin , page 8 of 9
For the foregoing reasons, the Taxpayer's protest IS DENIED. The Department properly

denied Taxpayer’s protest of the underlying assessment as untimely.

DATED: May 20, 2016.

Brian VanDenzen
Chief Hearing Officer
Administrative Hearings Office
P.O. Box 6400
Santa Fe, NM 87502

In the Matter of the Protest of Reggie Olguin , page 9 of 9