Could Martin Moore challenge an old gross receipts tax assessment by protesting the later warrant of levy after he had not timely protested the assessment itself?

Plain-English summary

Martin Moore could not use a protest of a warrant of levy to reopen a gross receipts tax assessment he had never timely protested. The AHO upheld the Department's $10,946.22 collection warrant.

The Department assessed Moore and Eunice Sports Broadcasting for gross receipts tax, penalty, and interest on February 17, 2016 after a Schedule C mismatch. Moore acknowledged receiving the assessment but did not protest it.

More than a year later, the liability remained unpaid. On March 2, 2017, the Department issued a warrant of levy for $10,946.22. Moore then filed a timely protest of the warrant, but his arguments attacked the underlying assessment rather than the legality of the collection document.

The underlying assessment was no longer reviewable

Section 7-1-24(C) allowed the Department to enforce collection when a taxpayer failed to protest within the required period and remained delinquent.

The AHO explained that statutory protest deadlines are jurisdictional. Because Moore did not timely protest the assessment, the hearing officer had no authority to decide his later claims and defenses against that assessment.

Moore said he had not known about his protest rights. The decision took administrative notice that assessment recipients also receive FYI-406, Your Rights Under the Tax Laws, which explains how to protest.

The Department was entitled to levy

Under Section 7-1-16, a taxpayer becomes delinquent when an assessment remains unpaid for 90 days without a protest or security for payment.

Moore did none of those things. Once the 90 days elapsed, Sections 7-1-31 and 7-1-32 allowed the Department to levy the delinquent taxpayer's property if the statutory requirements were met.

The AHO reviewed the warrant and its attached schedule and found that they satisfied those requirements. Moore did not identify any defect in how the warrant itself was issued or served.

Result: protest DENIED. The warrant of levy remained valid, and the hearing did not reopen the underlying tax assessment.

What this means for you

Taxpayers receiving an assessment

Do not wait for collection action to raise substantive objections. A later levy protest is not a substitute for a timely protest of the assessment itself.

Taxpayers facing a warrant of levy

The issue in a levy protest is whether the Department lawfully issued and served the warrant. Arguments about the amount or merits of an unprotested assessment may be outside the hearing officer's jurisdiction.

Businesses disputing a Schedule C mismatch

Respond during the assessment-protest window and preserve supporting records. Moore lost the opportunity for administrative review of his mismatch defenses because he did not protest the assessment.

Common questions

Q: Did Moore timely protest the levy?
A: Yes, but that gave the AHO jurisdiction only over the warrant, not the old assessment.

Q: Why was Moore considered delinquent?
A: More than 90 days passed without payment, a protest, or security for payment.

Q: Could the AHO consider Moore's defenses to the gross receipts assessment?
A: No. The assessment had not been timely protested.

Q: Was the warrant itself defective?
A: No. The AHO found that the warrant and attached schedule met the statutory requirements and were properly served.

Q: How much did the levy seek?
A: $10,946.22 as of March 2, 2017.

Citations and references

Statutes:

• NMSA 1978, § 7-1-16 — delinquent taxpayer definition
• NMSA 1978, § 7-1-24(C) — assessment protest deadline and collection authority
• NMSA 1978, §§ 7-1-31 and 7-1-32 — collection by levy and warrant requirements
• NMSA 1978, § 7-1-25 — right to appeal the administrative decision

Cases cited:

• Associated Petroleum Transport v. Shepard, 1949-NMSC-002 — failure to follow the protest procedure deprived the tax tribunal of jurisdiction
• Lopez v. New Mexico Department of Taxation & Revenue, 1997-NMCA-115 — tax protest timing requirement
• Chan v. Montoya, 2011-NMCA-072 — untimely tax claims dismissed under statutory deadlines

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Martin D. Moore / Eunice Sports Broadcasting
• Decision PDF: D&O 17-32

Original ruling text

STATE OF NEW MEXICO
ADMINISTRATIVE HEARINGS OFFICE
TAX ADMINISTRATION ACT

IN THE MATTER OF THE PROTEST OF No. 17-32
MARTIN D. MOORE
EUNICE SPORTS BROADCASTING
TO WARRANT OF LEVY
ISSUED UNDER LETTER
ID NO. L1460562224

DECISION AND ORDER

A formal hearing on the above-referenced protest was held on June 23, 2017 before

Hearing Officer Chris Romero in Santa Fe, New Mexico. The Taxation and Revenue Department

(Department) was represented by Mr. Marek Grabowski, Staff Attorney. Ms. Veronica Galewaler,

Auditor, also appeared on behalf of the Department. Mr. Martin D. Moore (Taxpayer) appeared

in person and represented himself. The Hearing Officer took notice of all documents in the

administrative file. Department Exhibit A and Taxpayer Exhibits 1 – 5 were admitted. A more

detailed description of exhibits submitted at the hearing is included on the Administrative

Exhibit Coversheet. Based on the evidence and arguments presented, IT IS DECIDED AND

ORDERED AS FOLLOWS:

FINDINGS OF FACT

1. As a result of a Schedule C mismatch, the Department assessed the Taxpayer for gross

receipts taxes, penalty, and interest on February 17, 2016. [Testimony of Ms. Galewaler].

2. Although he received the assessment, the Taxpayer did not file a protest of the

assessment. [Testimony of Mr. Moore].

3. As of March 2, 2017, the Taxpayer had not paid the assessment and the Department

issued a Warrant of Levy under Letter ID No. L1460562224 for a total amount due of

$10,946.22.

4. On March 14, 2017, the Taxpayer filed a formal protest to the Warrant of Levy. The

protest was received by the Department’s Protest Office on March 27, 2017.

5. Taxpayer’s protest did not assert that the Warrant of Levy had been improperly issued.

Rather, the Taxpayer asserted claims and defenses against the underlying assessment.

6. On March 29, 2017, the Department acknowledged the Taxpayer’s protest.

7. On May 8, 2017, the Department filed a Hearing Request seeking a hearing on the merits

of Taxpayer’s protest.

8. On May 9, 2017, the Administrative Hearings Office entered a Notice of Administrative

Hearing which set a hearing on the merits of Taxpayer’s protest for June 6, 2017.

9. On May 16, 2017, the Department filed an Unopposed Motion to Continue Formal Merits

Hearing.

10. On May 30, 2017, the Taxpayer waived the 90-day hearing requirement in order to

accommodate the Department’s request for a continuance.

11. On May 31, 2017, the Administrative Hearings Office entered a Continuance Order and

Amended Notice of Administrative Hearing scheduling a hearing on the merits of

Taxpayer’s protest for June 23, 2017.

DISCUSSION

Although the Taxpayer was permitted to discuss his defenses to the underlying

assessment, the issue properly before the Hearing Officer is limited to whether the Warrant of

Levy arising from that assessment was in accordance with the law.

The Taxpayer candidly acknowledged that he received the assessment but did not file a

protest. Although, the Taxpayer claimed to be unaware of his right to protest the assessment, the

In the Matter of the Protest of
Martin D. Moore
Eunice Sports Broadcasting
Page 2 of 7
Hearing Officer takes administrative notice that taxpayers receiving assessments are also

provided with a copy of the Department’s publication, FYI-406: Your Rights Under the Tax

Laws, which addresses in detail the manner by which taxpayers may file a protest in order to

dispute a Notice of Assessment and Demand for Payment.

Where a taxpayer fails to file a protest within the required period of time, the secretary

may proceed to enforce collection of tax if the taxpayer is delinquent within the meaning of

NMSA 1978, Section 7-1-16. See NMSA 1978, Sec. 7-1-24 (C). Because there is no authority

under the law to dispute an assessment after the time to protest has elapsed, the Hearing Officer

is without jurisdiction to consider the claims and defenses that the Taxpayer presented to the

underlying assessment. See Associated Petroleum Transp. v. Shepard, 1949-NMSC-002, ¶6 &

¶11, 53 N.M. 52 (taxpayer’s inability to timely follow the then-existing protest procedure

deprived the State Tax Commission of jurisdiction over the protest); Chan v. Montoya, 2011-

NMCA-72, 150 N.M. 44 (sustaining dismissal of a property taxpayer’s complaints for refund

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

imposed deadlines); Lopez v. New Mexico Dep't of Taxation & Revenue, 1997-NMCA-115, 124

N.M. 270 (a protest must be filed within the time required by law).

In this case, when the Taxpayer’s liability had not been satisfied or protested by March 2,

2017, a date more than one year after the assessment, the Department proceeded with its

collection activities.

Levies.

The Department may collect taxes owed by a delinquent taxpayer by levy on all property

of the taxpayer. See NMSA 1978, Sec. 7-1-31 (1993). A taxpayer is delinquent if an assessment

In the Matter of the Protest of
Martin D. Moore
Eunice Sports Broadcasting
Page 3 of 7
against a taxpayer is not paid in full within 90 days of the assessment, protested, or security for

payment has not been furnished. See NMSA 1978, Sec. 7-1-16. The Taxpayer admitted to

receiving the assessment of February 17, 2016. The Taxpayer further admitted that he did not file

a protest. When 90 days elapsed and the Taxpayer had neither paid the assessment, filed a formal

protest, nor furnished security for payment, the Taxpayer became delinquent. See NMSA 1978,

Sec. 7-1-16 (A).

The Department was then allowed to proceed with collection by levy upon all property or

rights to property of the delinquent Taxpayer. See NMSA 1978, Sec. 7-1-31. In this matter, the

Department issued a Warrant of Levy. Levies are required to meet certain criteria in order to be

valid. See NMSA 1978, Sec. 7-1-32 (1993). The Warrant of Levy in this case, including its

attached schedule, satisfied the statutory criteria. See id. Consequently, the Warrant of Levy

was properly executed and Taxpayer presented no claims that the Warrant of Levy did not

comply with the law.

For reasons provided, the Warrant of Levy from which the protest arose satisfied the

statutory requirements of NMSA 1978, Sec. 7-1-31 and Taxpayer’s protest should be denied.

CONCLUSIONS OF LAW

1. The Taxpayer filed a timely written protest to the Warrant of Levy issued under

Letter ID No. L1460562224, and jurisdiction lies over the parties and the subject matter of this

protest.

2. The Taxpayer was a delinquent taxpayer as of March 2, 2017, and the Department

was able to enforce collection by levy. See NMSA 1978, Sec. 7-1-31.

In the Matter of the Protest of
Martin D. Moore
Eunice Sports Broadcasting
Page 4 of 7

3. The Warrant of Levy satisfied the statutory requirements and was properly served.

See NMSA 1978, Sec. 7-1-32.

4. Claims and defenses to the underlying assessment were never protested and not

properly before the Hearing Officer. See NMSA 1978, Sec. 7-1-24.

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

DATED: June 30, 2017

Chris Romero
Hearing Officer
Administrative Hearings Office
P.O. Box 6400
Santa Fe, NM 87502

In the Matter of the Protest of
Martin D. Moore
Eunice Sports Broadcasting
Page 5 of 7
NOTICE OF RIGHT TO APPEAL

Pursuant to NMSA 1978, Section 7-1-25 (2015), 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. If an appeal is not timely filed with the Court of Appeals within 30 days, this

Decision and Order will become final. Rule of Appellate Procedure 12-601 NMRA articulates

the requirements of perfecting an appeal of an administrative decision with the Court of Appeals.

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 begin preparing the record proper. The parties will each be provided with a

copy of the record proper at the time of the filing of the record proper with the Court of Appeals,

which occurs within 14 days of the Administrative Hearings Office receipt of the docketing

statement from the appealing party. See Rule 12-209 NMRA.

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Martin D. Moore
Eunice Sports Broadcasting
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In the Matter of the Protest of
Martin D. Moore
Eunice Sports Broadcasting
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