The IRS reclassified me from contractor to employee, so I had to amend my old state returns and pay more tax. I wasn't at fault — do I still owe New Mexico interest, and isn't the assessment too old?

Plain-English summary

Kelly A. Day worked for Edible Communities, Inc., which classified her as an independent contractor and issued her 1099s for 2009-2014. She had no role in that classification and, relying on the 1099s, filed her original New Mexico personal income tax (PIT) returns as a contractor for 2009-2011.

After she was terminated in late 2014, she filed an IRS Form SS-8 challenging her status, and on March 14, 2016 the IRS determined she had been an employee, not a contractor. That changed the basis for her federal tax, so she filed amended New Mexico PIT returns for 2009-2011 showing additional New Mexico tax (and she had to repay a couple of small refunds she'd earlier received). She paid the tax, and the Department waived all penalties, agreeing she was not negligent. That left only interest — $238.50 total ($48.18 for 2009, $75.99 for 2010, $114.33 for 2011).

Kelly Day protested the interest and moved for summary judgment. Hearing Officer David Buchanan denied the protest:

• Interest is mandatory and is not a "fine." Section 7-1-67 says interest "shall be paid" on tax not paid by its due date — the word "shall" leaves the Department no discretion (Marbob Energy). And interest is not punitive: it compensates the state for the time value of revenue that was paid late, and is proportional to the tax owed. So it does not violate the Excessive Fines Clauses of the U.S. Constitution (Eighth Amendment) or the New Mexico Constitution (art. II, § 13), even though the taxpayer was blameless.
• The assessment was not time-barred. The general three-year limit in Section 7-1-18(A) did not apply. Because the IRS determination changed the basis for computing her federal tax, Section 7-1-13(C) required her to file amended New Mexico returns within 180 days, and Section 7-1-18(E) then allowed the Department to assess the resulting liability for three years from the end of the calendar year the amended return was required — here, through the end of 2019.
• "Relation back" did not save her. She cited old federal Board of Tax Appeals cases (Weaver; Sargent) for the idea that amended returns relate back to the originals. The Hearing Officer distinguished them: those involved the federal taxing authority and amended returns with no new income or deduction facts, whereas her amended returns changed both income and deductions — and New Mexico assesses independently of the IRS (Holt).
• No fees. She was not the prevailing party, so no costs or attorney's fees (Section 7-1-29.1). (The Hearing Officer also excluded a late interest table the Department submitted after the hearing, sustaining her due-process objection — but that did not change the outcome.)

Result: the protest and summary-judgment motion were denied, and Kelly Day was liable for $238.50 in interest.

What this means for you

Workers reclassified from contractor to employee

If the IRS reclassifies you (or you successfully challenge a 1099), the change can increase your state income tax for the affected years. Even if the misclassification was entirely your employer's doing, you will generally still owe interest on the additional New Mexico tax — interest follows the unpaid tax regardless of fault. The upside seen here: the Department waived the penalty because there was no negligence.

Anyone who has to amend old returns after a federal change

A federal adjustment (IRS audit, SS-8 determination, amended federal return) can reopen otherwise-closed New Mexico years. You must file an amended New Mexico return within 180 days (Section 7-1-13(C)), and the state gets a fresh three-year window to assess measured from that amended-return deadline (Section 7-1-18(E)) — so "it's more than three years old" is usually not a defense in this situation.

Accountants and tax professionals

Two durable points: (1) statutory interest is compensatory, not punitive, so Excessive-Fines and "innocent taxpayer" arguments against interest do not work; and (2) the relation-back theory for amended returns is narrow — it may help only where the amended return introduces no new income or deduction facts, and it does not bind New Mexico, which assesses independently of the IRS.

Common questions

Q: The misclassification was my employer's fault. Why do I owe interest?
A: Because interest is not a penalty for wrongdoing — it compensates the state for tax paid late. It is mandatory under Section 7-1-67 regardless of fault. (Your lack of fault did help you avoid the penalty, which the Department waived.)

Q: My old tax years are more than three years past. Aren't they closed?
A: Not once a federal change reopens them. A required amended return under Section 7-1-13(C) starts a new three-year assessment window under Section 7-1-18(E), running from the end of the year the amended return was due.

Q: Isn't charging interest to a blameless taxpayer an unconstitutional excessive fine?
A: No. The decision holds that interest is compensatory and proportional to the tax owed, so it is not a "fine" under the Eighth Amendment or New Mexico's Excessive Fines Clause.

Citations and references

Statutes and constitutional provisions:

• § 7-1-67 NMSA 1978 — interest "shall be paid" on tax not paid by its due date; mandatory and compensatory, not punitive
• § 7-1-13(C) NMSA 1978 — an amended New Mexico return is required within 180 days of a final federal adjustment for which IRS approval is required
• § 7-1-18(A) NMSA 1978 — general three-year limit on assessments
• § 7-1-18(E) NMSA 1978 — extended assessment window (three years from the end of the calendar year the amended return was required) for liability arising from an IRS adjustment or amended federal return
• § 7-1-69 NMSA 1978 — civil negligence penalty (waived here because the taxpayer was not negligent)
• § 7-1-29.1 NMSA 1978 — costs and fees available only to a prevailing party
• U.S. Const. amend. VIII; N.M. Const. art. II, § 13 — Excessive Fines Clauses

Cases cited:

• Marbob Energy Corp. v. N.M. Oil Conservation Comm'n, 2009-NMSC-013, 146 N.M. 24 — the word "shall" makes a provision mandatory
• Holt v. N.M. Dep't of Taxation & Revenue, 2002-NMSC-034, 133 N.M. 11 — the state has authority to assess and collect tax independent of the IRS
• Appeal of Weaver, 4 B.T.A. 15 (1926), and Sargent v. C.I.R., 22 B.T.A. 1270 (1931) — cited by the taxpayer for relation-back of amended returns; distinguished

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Kelly A. Day
• Decision PDF: D&O 17-30

Original ruling text

STATE OF NEW MEXICO
ADMINISTRATIVE HEARINGS OFFICE
TAX ADMINISTRATION ACT

IN THE MATTER OF THE PROTEST OF
KELLY A. DAY No. 17-30
TO ASSESSMENTS AND REFUND DENIAL ISSUED UNDER LETTERS
ID NOs. L0399732272, L1473474096, L1788202544 and L1180229936

DECISION AND ORDER

A protest hearing occurred in the above captioned matter on April 25, 2017 before David

Buchanan, Esq., Hearing Officer Supervisor, in Santa Fe, New Mexico. Kelly A. Day

(“Taxpayer”) appeared for the hearing. Taxpayer was represented by attorney Michael Schwarz,

Esq. Taxpayer testified on her own behalf at the hearing. Staff Attorney Elena Morgan, Esq.

appeared representing the State of New Mexico Taxation and Revenue Department

(“Department”). Protest Auditor Mary Griego appeared and testified as a witness for the

Department. Taxpayer Exhibits 1 through 13 and Department Exhibits A through C and G pages

1-3 were admitted into the record. Based on the evidence and arguments presented, IT IS

DECIDED AND ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. Taxpayer started work at Edible Communities, Inc. in February 2009.

2. Edible Communities, Inc. hired Taxpayer as an independent contractor and

issued her 1099's for Tax Years 2009 through 2014. Tax Years 2009, 2010 and 2011 are the

only tax years still at issue in this protest.

3. Taxpayer had no role in determining her employment status with Edible

Communities, Inc.

4. In reliance upon the issued 1099s, Taxpayer timely filed her original tax
   returns for Tax Years 2009, 2010 and 2011 indicating she was an independent contractor for

Edible Communities, Inc.

5. On November 15, 2014, Edible Communities, Inc. terminated Taxpayer.

6. On April 6, 2015, Taxpayer filed an Internal Revenue Service (IRS) form

SS-8, contesting her classification as an independent contractor, contending that she was an

employee.

7. On March 14, 2016, the IRS issued its determination, ruling that Taxpayer was

an employee of Edible Communities, Inc. and not an independent contractor.

8. Based on the IRS determination of March 14, 2016, there was a change in the

basis for the computation of federal tax for Tax Years 2009, 2010 and 2011. Exhibits A, B and

C.

9. Based on the IRS determination of March 14, 2016, Taxpayer filed

Amended Personal Income Tax (PIT) Returns for Tax Years 2009, 2010 and 2011.

Exhibit 4.

(a) Taxpayer signed her Amended PIT Return for Tax Year 2010 on April

7, 2017 and for Tax Years 2009 and 2011 on April 9, 2016.

10. The Amended PIT Returns for Tax Years 2009, 2010 and 2011 resulted

in additional liability for New Mexico tax. Exhibits 5, 6 and 7.

11. Taxpayer had previously received a refund in the amount $102.00 based on

the original Tax Year 2009 PIT Return. Exhibit A.

12. The Tax Year 2009 Amended PIT Return filed by Taxpayer indicated that

there was $33 in tax due. Line 30 on the return states “Leave blank if you want penalty

computed for you.” Line 31 on the return states “Leave blank if you want interest computed

In the Matter of the Protest of Kelly A. Day, page 2 of 14
for you.” Taxpayer left lines 30 and 31 blank. Exhibit 4.

13. On August 31, 2016, the Department issued a Return Adjustment Notice for

Tax Year 2009 indicating the Proposed Assessment of $33.00 in tax, $6.60 in penalty, $27.50

in interest and -$102.00 in credits. Exhibit A.

14. On September 7, 2016, the Department issued a Notice of Assessment and

Demand for Payment for Tax Year 2009 in the amount of $102.00 tax and $20.68 interest for

repayment of the previously issued refund. Exhibit A.

15. Taxpayer previously donated a $2.00 refund based on the original Tax Year

2010 PIT Return, Exhibit B.

16. The Tax Year 2010 Amended PIT Return filed by Taxpayer indicated that

there was $450 in tax due. Line 32 on the return states “Leave blank if you want penalty

computed for you.” Line 33 on the return states “Leave blank if you want interest computed

for you.” Taxpayer left lines 32 and 33 blank. Exhibit 4.

17. On August 31, 2016, the Department issued a Return Adjustment Notice for

Tax Year 2010 indicating the Proposed Assessment of $450.00 in tax, $90.00 in penalty and

$75.99 in interest. Exhibit A.

18. The Department did not issue a Notice of Assessment for Tax Year 2010 for

repayment of the previously issued $2 refund that had been donated by Taxpayer.

19. Taxpayer previously received a tax refund in the amount $58.00 based on the

original Tax Year 2011 PIT Return, Exhibit C.

20. The Tax Year 2011 Amended PIT Return filed by Taxpayer indicated that

there was $675 in tax due along with an underpayment of estimated tax penalty of $15 (as

indicated on Line 30). Line 32 on the return states “Leave blank if you want penalty

In the Matter of the Protest of Kelly A. Day, page 3 of 14
computed for you.” Line 33 on the return states “Leave blank if you want interest computed

for you.” Taxpayer left lines 32 and 33 blank. Exhibit 4.

21. On August 31, 2016, the Department issued a Return Adjustment Notice for

Tax Year 2011 indicating the Proposed Assessment of $737.00 in tax, $157.23 in penalty,

$106.68 in interest and -$58.00 in credits. Exhibit C.

22. On September 7, 2016, the Department issued a Notice of Assessment and

Demand for Payment for Tax Year 2011 in the amount of $58.00 tax and $7.65 interest for

repayment of the previously issued refund. Exhibit C.

23. On September 22, 2016, Taxpayer filed a Formal Protest pertaining to the

assessments for Tax Years 2009 through 2011.

24. Taxpayer paid all taxes due and owing for Tax Years 2009 through 2011.

25. The Department waived all penalties for Tax Years 2009 through 2011.

26. On November 1, 2016, the Department filed a request for consolidated hearing in

this matter with the Administrative Hearings Office.

27. On November 3, 2016, the Administrative Hearings Office issued a Notice of

Hearing setting this matter for a merits hearing on November 21, 2016.

28. On November 8, 2016, Taxpayer submitted a Notice of Unavailability, requested

a continuance and asked that the matter be set for a scheduling conference.

29. On November 15, 2016, the Administrative Hearings Office vacated the merits

hearing and set the matter for a telephonic scheduling hearing on November 29, 2016.

30. On November 29, 2016, a telephonic scheduling hearing was held. Both parties

agreed that the hearing met the requirement that the hearing be held within 90 days of the protest.

31. On November 30, 2016, the Administrative Hearings Office issued an Order of

In the Matter of the Protest of Kelly A. Day, page 4 of 14
Abeyance so that related matters could be addressed and possibly consolidated with the protest.

32. On December 15, 2016, Taxpayer, submitted a Formal Protest seeking a refund

for taxes paid for Tax Years 2009, 2010 and 2011.

33. On December 30, 2016, the Department filed a consolidated hearing request

involving Letter ID Nos L0399732272, L1473474096, L1788202544 and L1180229936.

34. On December 30, 2016, Taxpayer filed a Motion for Summary Judgment.

35. On January 10, 2017, the Department objected to the summary judgment.

36. On January 11, 2017, the Administrative Hearings Office issued notice that a

telephonic status conference would be held on January 26, 2017.

37. On January 19, 2017, Taxpayer replied and responded to the Department’s

objection to Summary Judgment.

38. On January 26, 2017, a telephonic status conference was conducted.

39. On January 26, 2017, Taxpayer submitted supplemental authority in support of

the Motion for Summary Judgment.

40. On January 26, 2017, the Administrative Hearings Office issued a Scheduling

Order and Notice of Administrative Hearing setting the protest for a hearing on the merits on

April 25, 2017. In that order, the Hearing Officer reserved any determination on the issue of

summary judgment.

41. On March 29, 2017, Taxpayer submitted a memorandum of law arguing that the

assessment of interest in this matter violates the U.S. and New Mexico Constitutions.

42. On April 5, 2017, a Joint Prehearing Statement was filed.

43. On April 5, 2017, Taxpayer submitted a memorandum of law arguing that

Taxpayer should be awarded attorney’s fees.

In the Matter of the Protest of Kelly A. Day, page 5 of 14

44. On April 10, 2017, Taxpayer submitted a Proposed Request for Findings of Fact

and Conclusions of Law.

45. On April 25, 2017, a hearing on the merits was conducted.

46. On May 18, 2017, the Department submitted a Table showing interest liability.

Submission of the Table by the Department was not discussed at the hearing.

47. On May 19, 2017, Taxpayer objected to the Table because it was not submitted

at the hearing and any consideration would violate Taxpayer’s due process rights.

48. On May 19, 2017, the Department submitted Proposed Findings of Fact and

Conclusions of Law as discussed at the hearing.

49. On May 19, 2017, Taxpayer submitted Proposed Request for Findings of Fact

and Conclusions of Law as discussed at the hearing.

50. Taxpayer was without fault in causing her the erroneous classification of her

employment status with Edible Communities, Inc. as an independent contractor.

51. Taxpayer did not engage in fraud, deceit or misrepresentation or exhibit any

intent to evade taxes when she filed her original PIT Returns.

52. Taxpayer did not fail to complete or file any PIT Returns.

53. Taxpayer has not been audited for any of the tax years in question by the IRS.

54. Taxpayer has not signed any document agreeing to waive the statute of

limitations for any assessment.

DISCUSSION

Disposition of the Table Submitted by Department on May 18, 2017.

The Department submitted a table for the Hearing Officer’s consideration on May 18, 2017.

Taxpayer objected to consideration of the table because it was not submitted at the hearing and

In the Matter of the Protest of Kelly A. Day, page 6 of 14
any consideration would violate Taxpayer’s due process rights. No request or provision for

submission of the Table was made at the time of the hearing. Taxpayer did not have the ability to

cross-examine witnesses as to the content of the Table since it was submitted after the hearing.

The Hearing Officer hereby sustains Taxpayer’s objection and excludes the table submitted by the

Department on May 18, 2017 from consideration in this matter.

Constitutionality of the Imposition of Interest on Taxpayer.

Taxpayer argues that the assessment of interest against her is tantamount to imposing an

excessive fine in violation of the Eighth Amendment of the United States Constitution and the

Excess Fines Clause of Article II, Section 13 of the New Mexico Constitution. Taxpayer argues

that she was completely without fault in this matter and reasonably relied on her employer’s

determination that she as an independent contractor when she filed her original Tax Year 2009,

2010 and 2011 PIT Returns.

The Excess Fines Clause provides that “(e) excessive bail shall not be required, nor

excessive fines imposed nor cruel and unusual punishment inflicted.” The Amendment functions

as a limitation of the Government’s power to punish through the extraction of payments.

Taxpayer’s argument that the imposition of interest is improper because the taxpayer was an

“innocent victim” is not persuasive. The legislature has authorized the imposition of a penalty

with discretion to recognize that taxpayers’ situations may arise that may be beyond their

control. The Department recognized that Taxpayer’s filing of a late return was not due to

negligence on the part of the Taxpayer pursuant to 1978 NMSA, §7-1-69 and NMAC

§3.1.11.10. That recognition resulted in the abatement of Taxpayer’s liability for any penalty

for Tax Years 2009, 2010 and 2011.

In the Matter of the Protest of Kelly A. Day, page 7 of 14
Interest “shall be paid” on taxes that are not paid on or before the date on which the tax is

due. NMSA 1978, § 7-1-67 (A). The word “shall” indicates that the assessment of interest is

mandatory, not discretionary. See Marbob Energy Corp. v. N.M. Oil Conservation Comm’n.,

2009-NMSC-013, ¶ 22, 146 N.M. 24. The assessment of interest is not designed to punish

taxpayers, but to compensate the state for the time value of unpaid revenues. The legislature, by

authorizing the imposition of interest, allows the state to recover its damages due to late payment

of tax. The Department calculated interest on the late tax payments and on the amounts previously

refunded to Taxpayer based on the original PIT Returns. The interest was the value of money over

time and was not punitive. It was imposed to compensate the Department for the lack of use of the

money that was properly due the Department. The interest imposed on the Taxpayer was not a

penalty for purposes of the Excess Fines Clause. The interest imposed was directly proportional

to the balance of the tax which was due and the refunds which the Taxpayer was required to repay.

Statute of Limitations.

Taxpayer argued that she is entitled to a refund of the tax paid and that she is not liable

for any interest because the statute of limitations bars the assessment of that tax and interest by

the Department. NMSA 1978, § 7-1-18 (A) states: “Except as otherwise provided in this section,

no assessment of tax may be made by the department after three years from the end of the

calendar year in which payment of the tax was due, and no proceeding in court for the collection

of such tax without prior assessment thereof shall be begun after the expiration of such period.”

NMAC § 3.1.1.16 (2010) defines tax to include the amount of any related interest or civil

penalty.

Taxpayer cited Appeal of Weaver, 4 B.T.A. 15 (1926) and Sargent v. C.I.R., 22 B.T.A

1270 (1931) in support of the proposition that amended tax returns relate back to the original

In the Matter of the Protest of Kelly A. Day, page 8 of 14
returns and do not furnish a starting point for the running of the statute of limitations. However,

the cases cited by Taxpayer are distinguishable from the facts at hand. Both cases dealt with

assessment by the Federal taxing authority, rather than the Department. See Holt v. N.M. Dep't

of Taxation & Revenue, 2002- NMSC-34, ¶6, 133 N.M. 11 (state has the authority to assess and

collect tax independent of IRS). In addition, both cases found that the amended returns relate

back to the original return, but stressed the fact that the amended returns in those cases contained

no facts concerning gross income or allowable deductions that were not contained in the original

returns. In the present protest, there were changes to both the gross income and deductions

claimed in each of the amended returns.

NMSA 1978, § 7-1-13 (C) requires that an amended return be filed within 180 days of

final determination of any adjustment to the basis for computation for any federal tax as a result

of the making of any change for which federal approval is required by the Internal Revenue

Code. The IRS issued a determination changing Taxpayer’s status from an independent

contractor to an employee on March 14, 2016. Since Taxpayer was originally issued 1099 forms

as an independent contractor, the IRS determination was necessary for that change under the

Internal Revenue Code. This IRS determination process is equivalent to the IRS approval

language contemplated under NMSA 1978, § 7-1-13 (C). The IRS determination resulted in a

change in the basis for computation of federal tax. Taxpayer indicated increased amounts of

Federal Adjusted Gross Income and the Federal standard or itemized deduction on each of the

Amended PIT Returns for Tax Years 2009, 2010 and 2011. Thus, Taxpayer was required to file

amended returns in accordance with § 7-1-13 (C).

NMSA 1978, § 7-1-18 (E) states: “If any adjustment in the basis for computation of any

federal tax is made as a result of an audit by the internal revenue service or the filing of an

In the Matter of the Protest of Kelly A. Day, page 9 of 14
amended federal return changing a prior election or making any other change for which federal

approval is required by the Internal Revenue Code that results in liability for any tax, the amount

thereof may be assessed at any time, but not after three years from the end of the calendar year in

which filing of an amended return is required by Subsection C of Section 7-1-13 NMSA 1978.”

The IRS issued its determination on March 14, 2016. Taxpayer was required to file an

amended return within 180 days. Therefore, the Department may assess Taxpayer for any tax

liabilities based on the Amended PIT Returns through the end of 2019. The Department is not

barred by NMSA 1978, § 7-1-18 (A) from assessing any taxes or interest against Taxpayer based

on the Amended PIT Returns.

Amount of Interest Due.

For Tax Year 2009, Taxpayer was refunded $102 based on the original PIT Return. The

Department determined that interest of $20.68 on the $102 refund had accrued from the time

Taxpayer received the refund through September 7, 2016, when the Notice of Assessment of

Taxes and Demand for Payment was issued by the Department. The Department also calculated

the interest as requested in the Amended PIT Return and determined that an interest amount of

$27.50 was due from Taxpayer on the taxes that had not been timely paid at the time that the

original PIT Return was required to be filed. Thus, the Department determined that Taxpayer

owed interest for Tax Year 2009 in the total amount of $48.18.

For Tax Year 2010, Taxpayer donated her refund of $2 based on the original PIT Return.

The Department did not attempt to obtain any return of that refund or to collect any interest

based on that refund. The Department calculated the interest as requested in the Amended PIT

Return and determined that interest in the amount of $75.99 was due from Taxpayer on the taxes

that had not been timely paid at the time that the original PIT Return was required to be filed.

In the Matter of the Protest of Kelly A. Day, page 10 of 14
Thus, the Department determined that Taxpayer owed interest for Tax Year 2010 in the amount

of $75.99.

For Tax Year 2011, Taxpayer was refunded $58 based on the original PIT Return. The

Department determined that interest of $7.65 on the $58 refund had accrued from the time

Taxpayer received the refund through September 7, 2016, when the Notice of Assessment of

Taxes and Demand for Payment was issued by the Department. The Department also calculated

the interest as requested in the Amended PIT Return and determined that interest in the amount

of $106.68 was due from Taxpayer on the taxes that had not been timely paid at the time that the

original PIT Return was required to be filed. Thus, the Department determined that Taxpayer

owed interest for Tax Year 2011 in the total amount of $114.33.

CONCLUSIONS OF LAW

A. Taxpayer filed a timely, written protest and jurisdiction lies over the parties and the

subject matter of this protest.

B. The hearing was timely held within 90-days of protest under NMSA 1978, Section

7-1B-8(A) (2015).

C. An IRS determination was required by the Internal Revenue Code in order to

change Taxpayer’s status from an independent contractor to an employee for Tax Years

2009, 2010 and 2011. That determination was equivalent to an approval as contemplated

under NMSA 1978, § 7-1-13 (C).

D. As a result of the IRS determination, there was an adjustment to the basis for

computation of Taxpayer’s federal taxes for Tax Years 2009, 2010 and 2011.

E. Taxpayer was required to file amended PIT returns for Tax Years 2009, 2010

and 2011 within 180 days of the IRS determination on March 14, 2016 that Taxpayer was an

In the Matter of the Protest of Kelly A. Day, page 11 of 14
employee rather than an independent contractor. NMSA 1978, § 7-1-13 (C).

F. The Department may assess the taxes for which Taxpayer is liable based on

the Amended PIT Returns through the end of 2019. NMSA 1978, § 7-1-18 (E).

G. Taxpayer is not entitled to a refund of any taxes paid based on the Amended

PIT Returns.

H. Taxpayer left the lines blank on each of the Amended PIT Returns indicating

that the Department should calculate any penalty and interest for Taxpayer. Thus, the

Department was required to calculate any penalty and interest that Taxpayer owed and notify

Taxpayer of those amounts.

I. The imposition of interest by the Department does not violate either the

United States Constitution or the New Mexico Constitution.

J. Taxpayer was liable for interest when she filed her Amended PIT Returns

because she did not pay the tax when it was originally due. NMAC § 3.1.4.10 (2010).

K. Taxpayer’s late filing of Amended PIT Returns for Tax Years was not due to

Taxpayer’s negligence so she was not liable for penalty. NMAC § 3.1.4.10 (2010).

L. The Department may assess Taxpayer for tax liabilities based on the

Amended PIT Returns for three years from the end of the calendar year in which filing of the

amended return was required. NMSA 1978, § 7-1-13 (C) and § 7-1-18 (E).

M. The Department properly determined that the total amount of interest due

from Taxpayer for Tax Year 2009 was $48.18. NMSA 1978, § 7-1-3 (Y) and § 7-1-67.

N. The Department properly determined that the total amount of interest due

from Taxpayer for Tax Year 2010 was $75.99. NMSA 1978, § 7-1-3 (Y) and § 7-1-67.

O. The Department properly determined that the total amount of interest due

In the Matter of the Protest of Kelly A. Day, page 12 of 14
from Taxpayer for Tax Year 2011 was $114.33. NMSA 1978, § 7-1-3 (Y) and § 7-1-67.

P. Taxpayer is not entitled to any award of costs or fees because she is not the

prevailing party in this administrative proceeding. NMSA 1978, § 7-1-29.1.

For the foregoing reasons, Taxpayers’ Motion for Summary Judgement and Taxpayer’s

protest are DENIED. IT IS ORDERED that the Taxpayer is liable for the outstanding amount of

$238.50 in interest for Tax Years 2009, 2010 and 2011.

DATED: June 28, 2017.

David Buchanan
David Buchanan, Esq.
Hearing Officer
Administrative Hearings Office
P.O. Box 6400
Santa Fe, NM 87502

In the Matter of the Protest of Kelly A. Day, page 13 of 14
NOTICE OF RIGHT TO APPEAL

Pursuant to NMSA 1978, Section 7-1-25 (1989), the parties have the right to appeal this

decision by filing a notice of appeal with the New Mexico Court of Appeals within 30 days of the

date shown above. See Rule 12-601 NMRA. If an appeal is not filed within 30 days, this

Decision and Order will become final. Either party filing an appeal shall file a courtesy copy of

the appeal with the Administrative Hearings Office contemporaneous with the Court of Appeals

filing so that the Administrative Hearings Office may being preparing the record proper.

In the Matter of the Protest of Kelly A. Day, page 14 of 14