Did Joel and Jacqueline Drahman prove they changed domicile from New Mexico to Nevada before Joel received his final New Mexico paycheck in early 2016?

Plain-English summary

Joel and Jacqueline Drahman did not prove that they changed domicile from New Mexico to Nevada before Joel received his final New Mexico-employment paycheck in early 2016. Their $11,775 personal income tax refund claim was denied.

The Department adjusted their jointly filed 2016 New Mexico return by modifying New Mexico wages based on the W-2s and return information.

Joel's 13-year New Mexico employment ended December 31, 2015. His final paycheck was issued in the first days of 2016 with tax withheld consistently with earlier payments.

Joel established housing in Nevada

Joel rented a room in Las Vegas, Nevada from December 31, 2015 through March 15, 2016. Around March 10, he bought a home in Henderson and placed utilities in his name.

Those steps showed an intention to live in Nevada, but intention alone did not establish when the prior New Mexico domicile ended.

His family remained in New Mexico through the school year

Jacqueline continued working for the Clovis Municipal School District through the end of the 2015–2016 school year. Their minor child lived with her and attended New Mexico school.

Joel moved Jacqueline, the child, and their personal belongings to Nevada between approximately May 23 and May 30, 2016.

The location of spouse, minor child, school, employment, and personal property weighed heavily toward continuing New Mexico domicile until that move.

Early Nevada presence was not well established

Joel was not employed in Nevada and presented vague evidence about where he spent his time from January through May.

He acknowledged that he was rarely at the Nevada house during March, April, and May. Electricity usage averaged about 211 kWh per month over those months, then rose to 1,733 kWh in June when the family moved and remained at least 569 kWh per month afterward.

The AHO found the usage and testimony consistent with limited early presence rather than a settled full-time home.

Other objective ties still pointed to New Mexico

The couple had lived in New Mexico for more than 13 years. Their prior employment, child's schooling, and vehicle registrations were in New Mexico.

At least three vehicles were associated with them. Two remained registered in New Mexico into 2017, and a third still bore a New Mexico plate and used a Clovis address as of the 2017 hearing even though it was physically at the Nevada property.

Joel supplied no evidence about several other factors, including the address used on federal returns, driver licensing during 2016, financial accounts, community affiliations, or official-residency uses. He declined an opportunity to supplement the record with the 2016 return.

The factor balance did not prove a change before late May

New Mexico law treated domicile as continuing until the taxpayer proved both physical presence in the new place and a bona fide intention to make it the permanent home.

The AHO counted:

• eight factors favoring continued New Mexico domicile;
• five neutral factors; and
• zero factors favoring Nevada.

The evidence supported a future intention to settle in Nevada but did not establish a completed change before the family relocated after the school year.

The Drahmans did not challenge New Mexico tax on Jacqueline's 2016 school-district wages. The disputed income was Joel's final paycheck, and they failed to show he was no longer domiciled in New Mexico when he received it.

Result: protest DENIED. The Drahmans did not establish entitlement to the $11,775 refund.

What this means for you

Taxpayers changing domicile midyear

Document both physical presence and intent: move dates, family relocation, home use, employment, schools, vehicle and license changes, voter registration, financial accounts, tax-return addresses, and personal-property movement.

Married couples filing jointly

One spouse's early move may not establish that the household changed domicile, especially when the other spouse and minor children remain in the former state.

New homeowners before a full move

Buying a house and opening utilities are relevant but not conclusive. Actual use, time spent, employment, and family location can outweigh ownership alone.

Taxpayers challenging a return adjustment

Put the return and supporting records into evidence. Declining to supplement the record can leave important filing-status and address questions unresolved.

Common questions

Q: What refund did the Drahmans request?
A: $11,775.

Q: When did Joel establish Nevada housing?
A: He rented a room beginning December 31, 2015 and bought a home around March 10, 2016.

Q: When did Jacqueline and the child move?
A: Shortly after the school year ended, between approximately May 23 and May 30, 2016.

Q: Why did the utility records matter?
A: Low spring usage and Joel's admission that he was rarely there weakened proof of early physical presence; usage jumped when the family arrived.

Q: Did the AHO find they never became Nevada residents?
A: No. It held they failed to prove a change before the end of the school year, which was the relevant period for Joel's paycheck.

Q: How did the regulatory factors break down?
A: Eight favored New Mexico, five were neutral, and none favored Nevada.

Citations and references

Statutes and regulations:

• NMSA 1978, §§ 7-2-2(S) and 7-2-3 — resident definition and tax on resident net income
• Regulation 3.3.1.9(C) NMAC — domicile rules and objective factors
• Regulation 3.1.8.10(A) NMAC — taxpayer's refund burden

Cases cited:

• Hagan v. Hardwick, 1981-NMSC-002 — domicile continues until a change is proved
• Estate of Peck v. Chambers, 1969-NMSC-054 — change of domicile requires intent and physical presence
• Texas v. Florida, 306 U.S. 398 (1939) — declarations are not conclusive and objective domicile factors matter
• Severns v. New Mexico Taxation and Revenue Department, No. 31,817 (N.M. Ct. App. Apr. 1, 2013) — limited physical presence can undermine stated intent, cited as nonprecedential

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Joel W. & Jacqueline R. Drahman
• Decision PDF: D&O 18-01

Original ruling text

STATE OF NEW MEXICO
ADMINISTRATIVE HEARINGS OFFICE
TAX ADMINISTRATION ACT

IN THE MATTER OF THE PROTEST OF
JOEL W. & JACQUELINE R. DRAHMAN D&O # 18-01
TO RETURN ADJUSTMENT NOTICE
ISSUED UNDER LETTER
ID NO. L1442682160

DECISION AND ORDER

A formal hearing on the above-referenced protest was held on December 5, 2017 before

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

Department (hereinafter “Department”) was represented by Mr. Peter Breen, Staff Attorney. Ms.

Veronica Galewaler, Auditor, also appeared and testified as a witness on behalf of the

Department. Mr. Joel W. Drahman appeared for the hearing pro se on behalf of himself and his

spouse, Mrs. Jacqueline R. Drahman (hereinafter “Taxpayers”). The Hearing Officer took notice

of all documents in the administrative file. Taxpayer Exhibits 1 – 4 and Department Exhibits A –

E were admitted into the evidentiary record of the hearing without objection. 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. On June 6, 2017, the Department issued a Return Adjustment Notice under Letter

ID No. L1442682160 (hereinafter “Notice”) in reference to an adjustment made to Taxpayers’

2016 Personal Income Tax return. See Notice.

2. The adjustment stated that “NM wages were modified based on W2’s provided

with the return or information on the return.” See Notice, Pg. 2.

3. On August 23, 2017, Taxpayers executed a Formal Protest that was received by

the Department’s Protest Office on September 6, 2017. Taxpayers requested a refund in the

amount of $11,775.00 in affirmative relief.

4. On September 26, 2017, the Department acknowledged receipt of Taxpayers’

Formal Protest under Letter ID No. L1119698224.

5. On November 1, 2017, the Department filed a Hearing Request with the

Administrative Hearings Office.

6. On November 1, 2017, the Administrative Hearings Office entered a Notice of

Administrative Hearing setting a hearing on the merits of Taxpayers’ protest for December 5,

2017.

7. Mr. Drahman and Mrs. Jacqueline R. Drahman are presently married and have

been married during all times relevant to the above-captioned protest. [Testimony of Mr.

Drahman].

8. Taxpayers resided in New Mexico for more than 13 years prior to the period

relevant to their protest. [Testimony of Mr. Drahman].

9. Taxpayers filed their 2016 tax returns as married, filing jointly. [Testimony of

Ms. Galewaler; Dept. Ex. E].

10. For more than 13 years, Mr. Drahman was employed by ENMR Plateau

(hereinafter “Plateau”) in Clovis, New Mexico. His employment with Plateau concluded on

December 31, 2015. [Testimony of Mr. Drahman; Taxpayer Ex. 1].

11. Mr. Drahman’s final paycheck from Plateau was issued early in 2016. Mr.

Drahman estimated that the check was issued on the first Friday of 2016 and Plateau withheld

In the Matter of Joel W. & Jacqueline R. Drahman
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taxes in a manner consistent with previous payments made during Mr. Drahman’s employment.

[Testimony of Mr. Drahman].

12. Mr. Drahman was not thereafter employed in 2016. [Testimony of Mr. Drahman].

13. Mr. Drahman reported to move immediately to Nevada after his employment

terminated. Mr. Drahman rented a room at 1720 Olympia Drive, in Las Vegas, Nevada. He

rented the room from December 31, 2015 through March 15, 2016. [Testimony of Mr. Drahman;

Taxpayer Ex. 2].

14. On or about March 10, 2016, Mr. Drahman purchased a residential property at

3235 Via Seranova, Henderson, NV 89044 (hereinafter “Nevada Property”). [Testimony of Mr.

Drahman; Taxpayer Ex. 3].

15. Mr. Drahman procured utilities at the Nevada Property in his name. Utility service

commenced on March 10, 2016 and was continuous through the remainder of 2016. [Testimony

of Mr. Drahman; Taxpayer Ex. 4].

16. Utility bills for the Nevada Property illustrate a consumption of electricity

equivalent to the following number of kWh per month from March through May of 2016: March

• 218 kWh (March 10 – April 5) [Taxpayer Ex. 4.1]; April – 178 kWh (April 5 – May 4)

[Taxpayer Ex. 4.2]; and May – 236 kWh (May 4 – June 3) [Taxpayer Ex. 4.3].

17. Utility bills for the Nevada Property illustrate that consumption of electricity

significantly increased beginning in June of 2016. In comparison to the preceding months,

consumption of electricity from June through December of 2016 was: June – 1,733 kWh (June 3

– July 6) [Taxpayer Ex. 4.4]; July – 1,816 kWh (July 6 – August 4) [Taxpayer Ex. 4.5]; August –

1,580 kWh (August 4 – September 6) [Taxpayer Ex. 4.6]; September – 915 kWh (September 6 –

October 5) [Taxpayer Ex. 4.7]; October – 569 kWh (October 5 – November 2) [Taxpayer Ex.

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4.8]; November – 691 kWh (November 2 – December 5) [Taxpayer Ex. 4.9]; and December –

899 kWh (December 5 – January 5) [Taxpayer Ex. 4.10].

18. Mr. Drahman explained that the use of electricity was consistent with the amount

of time he or his family were present at the Nevada Property. With respect for months where the

consumption of electricity was notably low, particularly March, April, and May of 2016, Mr.

Drahman explained that was because he did not use much electricity and he was rarely present at

the Nevada Property. [Testimony of Mr. Drahman].

19. Mrs. Drahman continued to be employed by the Clovis Municipal School District

(hereinafter “the District”). She was employed by the District until the conclusion of the 2015 –

2016 school year. [Testimony of Mr. Drahman].

20. Taxpayers’ minor child resided with Mrs. Drahman and attended school in the

State of New Mexico until the conclusion of the 2015 – 2016 school year. [Testimony of Mr.

Drahman].

21. Shortly after conclusion of the 2015 – 2016 school year, Mrs. Drahman and

Taxpayers’ minor child relocated to the State of Nevada. [Testimony of Mr. Drahman].

22. Mr. Drahman said that he assisted with moving Mrs. Drahman, Taxpayers’ minor

child, and their personal belongings sometime between May 23 and May 30, 2016. [Testimony

of Mr. Drahman].

23. Although Mrs. Drahman was employed during the 2015 – 2016 school year, and

the termination of her employment coincided with the conclusion of the school year, the District

compensated her on an annual basis. Accordingly, the District reported compensation in its

reports to the department of workforce solutions on July 21, 2016 and October 18, 2016,

In the Matter of Joel W. & Jacqueline R. Drahman
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although the total wages reported in October 2016 were nominal. [Testimony of Mr. Drahman;

Dept. Ex. A].

24. Records indicate that Taxpayers owned at least three automobiles during the

relevant period of time. Two vehicles continued to be registered in the State of New Mexico

through the months of May and April, 2017. [Dept. Ex. B; Dept. Ex. D].

25. A third vehicle, bearing Vehicle Identification Number WBAPH77599NL84133

is presently registered in New Mexico, with the registration scheduled to expire on July 31, 2018.

[Testimony of Mr. Drahman; Dept. Ex. C].

26. This vehicle is presently located at the Nevada Property and continues to bear a

New Mexico license plate. [Testimony of Mr. Drahman].

27. As of December 5, 2017, the physical address provided for the vehicle is 217

Dominion Way, Clovis, NM 88101. Mr. Drahman is identified as the primary owner of the

vehicle. [Dept. Ex. C (see date in header)].

28. Mr. Drahman has never been registered to vote in New Mexico or Nevada, and

has no intention to register. [Testimony of Mr. Drahman].

29. Taxpayers have not provided further documentation to establish an entitlement to

a refund to the amount in dispute. [Testimony of Ms. Galewaler].

30. Taxpayers did not introduce their 2016 Personal Income Tax return or any other

supporting documents which could reasonably be relied upon for computing their tax obligation

for 2016.

DISCUSSION

The issue to be decided is whether Taxpayers are entitled to a refund equivalent to the

portion of taxes that Plateau withheld and paid to the State of New Mexico deriving from Mr.

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Drahman’s employment, which terminated on December 31, 2015. Mr. Drahman asserted that

this payment was his only income in 2016 and that it was paid after he moved to Nevada. Mr.

Drahman on Taxpayers’ behalf does not contest payment of taxes on income earned by Mrs.

Drahman who continued to work and reside in New Mexico until the conclusion of the 2015 –

2016 school year.

Mr. Drahman argued that he intended to establish Nevada as his home by moving there

immediately after concluding his employment with Plateau, although he also testified that he

moved to Nevada on December 30, 2015, which was slightly before concluding his employment.

Nonetheless, Mrs. Drahman and Taxpayers’ minor child remained in New Mexico where Mrs.

Drahman maintained employment with the District, and Taxpayers’ minor child attended school.

Mrs. Drahman and Taxpayers’ minor child relocated to Nevada at the conclusion of the 2015 –

2016 school year, on or about May 23 or 24, 2016. The Department argued that there was

insufficient evidence to establish that Mr. Drahman, changed domicile to Nevada as early as he

asserted.

Timeliness of Protest

Although the Department does not raise timeliness of the protest as an issue, the Hearing

Officer shall note for the record that the date appearing on the Notice is June 6, 2017. Taxpayers’

protest, although apparently executed on August 23, 2017, was not received at the Department’s

Protest Office until September 6, 2017. The duration of time between the date appearing on the

Notice and the date that the protest was received represented 92 days. To the extent an issue

could have been raised as to the timeliness of Taxpayers’ protest, under NMSA 1978, Sec. 7-1-

24, the Department did not do so. Consequently, the Hearing Officer presumed in the absence of

In the Matter of Joel W. & Jacqueline R. Drahman
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argument to the contrary that the protest was timely, and any potential objections as to the

timeliness of Taxpayers’ protest were waived.

Presumption of Correctness and Burden of Proof

Taxpayers have the burden of establishing they are entitled to the claimed refund at issue.

See Regulation 3.1.8.10 (A) NMAC. Taxpayers’ claim for refund is premised on an overpayment

of tax. “Where an exemption or deduction from tax is claimed, the statute must be construed

strictly in favor of the taxing authority, the right to the exemption or deduction must be clearly

and unambiguously expressed in the statute, and the right must be clearly established by the

taxpayer.” Wing Pawn Shop v. Taxation and Revenue Department, 1991-NMCA-024, ¶16, 111

N.M. 735 (internal citation omitted); See also TPL, Inc. v. N.M. Taxation & Revenue Dep't,

2003-NMSC-7, ¶9, 133 N.M. 447; See also Corr. Corp. of Am. of Tenn. v. State, 2007-NMCA-

148, ¶17 & ¶29, 142 N.M. 779 (Court of Appeals reviewed a refund denial through “lens of

presumption of correctness” and applied the principle that deductions underlying the claim for

refund are to be construed narrowly). Consequently, Taxpayers must show that they are entitled

to their claim for refund.

Filing Status and Residency

Ms. Galewaler testified that Mr. and Mrs. Drahman filed their 2016 New Mexico

Personal Income Tax return as married, filing jointly. Although Mr. Drahman explained his

intention to file separately in 2016, Ms. Galewaler confirmed that was not the case in this protest.

Mr. Drahman was provided with the opportunity to supplement the record with a copy of

Taxpayers’ 2016 PIT return, but declined. Consequently, this analysis of the evidence and law

will not speculate with regard to the outcome of Taxpayers’ protest had Taxpayers indeed filed

separately, rather than jointly.

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Personal income tax is imposed “upon the net income of every resident individual” in

New Mexico. See NMSA 1978, Section 7-2-3 (1981). A person is a resident if the person “is

domiciled in this state during any part of the taxable year” or is present in the state for 185 days

or more during the taxable year. See NMSA 1978, Section 7-2-2 (S) (2010). However, a person

who changes their place of abode to a location outside of New Mexico during the taxable year

“with the bona fide intention” of abiding there permanently is not a resident for the period of

time after that change of abode. Id. A person is domiciled where that person intends to return

after an absence and “has voluntarily fixed habitation of self and family with the intention of

making a permanent home.” See Regulation 3.3.1.9 (C) (1) NMAC (2010). Everyone is deemed

to be domiciled somewhere, and a person has only one domicile at a time. See id. Once domicile

is established, it does not change until the person moves “with the bona fide intention” of making

the new location his permanent home. See Regulation 3.3.1.9 (C) (2) NMAC (2010). There is not

a change of domicile if a person’s “intent is to stay away only for a limited time, no matter how

long”. See Regulation 3.3.1.9 (C) (3) NMAC (2010).

Residence is synonymous with domicile, and domicile does not require a person’s

continued physical presence. See Hagan v. Hardwick, 1981-NMSC-002, ¶ 10, 95 N.M. 517.

Domicile requires a physical presence at some time in the past with the intent to make a home

there. See id. Once domicile is established, it is presumed to continue until it is shown to have

changed. See Id., ¶ 11. Several factors should be considered in determining residency. See

Regulation 3.3.1.9 (C) (4) NMAC (2010). A person’s declarations are not sufficient to establish

domicile. See Texas v. Florida, 306 U.S. 398, at 417 (1939). In determining a person’s domicile,

the Supreme Court of the United States identified several factors to be considered. Id., at 414.

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These factors include time spent in a particular place, activities conducted there, what persons

and things of importance are there, intent, and evidence on other domiciles. See id.

The Department and its regulations employ similar criteria for the purpose of assessing a

person’s domicile. See Regulation 3.3.1.9 (C) (4) NMAC. The first factor used to determine

domicile is “homes or places of abode owned or rented (for the individual’s use) by the

individual, their location, size and value; and how they are used by the individual”. See

Regulation 3.3.1.9 (C) (4) (a) NMAC.

Although Mr. Drahman demonstrated that he rented a room in January, February, and a

portion of March in 2016, and then purchased the Nevada Property, those facts alone fail to

establish a change in domicile. The fact that Mrs. Drahman and Taxpayers’ minor child remained

in New Mexico weigh heavily in finding that Taxpayers continued to be domiciled in New

Mexico at least until the time Mrs. Drahman and Taxpayers’ minor child relocated to Nevada, at

or around the time that the 2015 – 2016 school year concluded. Before that time, Mrs. Drahman

continued to earn income in New Mexico, and both Mrs. Drahman and Taxpayers’ minor child

presumably maintained their personal belongings in New Mexico. In fact, Mr. Drahman made

reference to utilizing a U-Haul truck or trailer to move their personal belongings from New

Mexico to Nevada after conclusion of the 2015 – 2016 school year.

With respect to Mr. Drahman’s presence in Nevada, there was insufficient information to

establish how much time Mr. Drahman actually spent there prior to conclusion of the 2015 –

2016 school year. Mr. Drahman admitted that he was not employed after December 31, 2015

when he concluded his employment with Plateau. This is significant because Mr. Drahman

would not have been subject to employment obligations that may have restricted his ability to

In the Matter of Joel W. & Jacqueline R. Drahman
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travel to and from New Mexico where his spouse and minor child continued to reside, or

otherwise obligate him to remain in Nevada for continuous periods of time.

The Department also directed the Hearing Officer’s attention to Taxpayer Exhibit 4

which detailed the consumption of electricity at the Nevada Property from the time the property

was acquired through the end of 2016. The Hearing Officer observed that the consumption of

electricity in the months preceding the date that Mrs. Drahman and Taxpayers’ minor child

purportedly relocated there was significantly lower than the months after the relocation. The

Nevada Property consumed an average of 211 kWh per month in March, April, and May of

2016. Usage dramatically increased in June of 2016, to 1,733 kWh and never fell below 569

kWh per month for the remainder of the year.

Mr. Drahman asserted these observations were consistent with his use of electricity

during those periods of time. Mr. Drahman also explained that energy use rises dramatically in

the summer months as the demand for air conditioning increases. In this case, energy use

increased dramatically in June of 2016 which may coincide with the increased demands for

energy in the summer. However, the increase may also coincide with the testimony that Mrs.

Drahman and Taxpayers’ minor child relocated to the Nevada Property at the end of May.

However, Mr. Drahman also testified with respect for the months of March, April and

May, “When I lived out there by myself, yea, the electric bills were pretty low. I mean, I didn’t

use much electric. I was gone from the house almost all the time.” [See 42:39]. Mr. Drahman’s

testimony on this point was important because he admitted that he was rarely present at the

Nevada Property.

Considering that Mr. Drahman’s spouse and minor child continued to reside in New

Mexico, that Mr. Drahman was not employed in Nevada, that Mr. Drahman admitted that he was

In the Matter of Joel W. & Jacqueline R. Drahman
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frequently absent from the Nevada Property, and energy bills consistent with such admission, the

Hearing Officer is unpersuaded that Mr. Drahman utilized the Nevada Property as his fulltime

permanent residence at least until the summer months of 2016 when his family may have also

moved to Nevada. Therefore, this factor supports the Department’s finding that Taxpayers were

residents of New Mexico at least until the conclusion of the 2015 – 2016 school year.

The second factor is

where the individual spends time during the tax year and how that
time is spent; e.g., whether the individual is retired or is actively
involved in a business, and whether the individual travels and the
reasons for traveling, and where the individual spends time when
not required to be at a location for employment or business
reasons, and the overall pattern of residence of the individual[.]
3.3.1.9 (C) (4) (b) NMAC.

It was undisputed that from January 1, 2016 through the end of the 2015 – 2016 school

year, Mrs. Drahman and Taxpayers’ minor child continued to reside in New Mexico, working

and attending school. Although Mr. Drahman asserted that he had relocated to Nevada, the

record of where he spent his time between January 1, 2016 and the conclusion of the 2015 –

2016 school year remains vague. Mr. Drahman admitted that he was not working during this

period of time and that he was rarely at the Nevada Property. On the other hand, it was

undisputed that his family remained in New Mexico.

It is well-established that a change of domicile requires intent and physical presence in

the new location. See Estate of Peck v. Chambers, 1969-NMSC-054, 80 N.M. 290. A person

cannot “elect to make his home in one place…for general purposes of life, and in another, where

he in fact had no residence, for the purpose of taxation.” Texas v. Florida, 306 U.S. at 426.

Moreover, a lack of physical presence in the location can undermine a person’s expressed

In the Matter of Joel W. & Jacqueline R. Drahman
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intention to change domicile. See Severns v. New Mexico Taxation and Revenue Dep’t, No.

31,817, mem. op. at ¶ 12 (NMCA April 1, 2013) (non-precedential).

Mr. Drahman expressed his intention to relocate himself and his family to Nevada.

Taxpayers purchased a home and procured utility services. However, the evidence of physical

presence prior to the end of the 2015 – 2016 school year was negligible and unpersuasive. In

contrast, Mr. Drahman’s spouse and minor child remained in New Mexico where they worked

and attended school until the end of the 2015 – 2016 school year. This factor supports the

Department’s finding that Taxpayers were residents of New Mexico at least until the conclusion

of the 2015 – 2016 school year.

The third factor is the individual’s employment and its location. See Regulation 3.3.1.9

(C) (4) (c) NMAC. It was undisputed that Mr. Drahman’s employment in New Mexico

concluded on December 15, 2015, and that he was not thereafter employed in New Mexico or

Nevada. However, Mrs. Drahman continued to be employed in New Mexico through the end of

the 2015 – 2016 school year. This factor supports the Department’s finding that Taxpayers were

residents of New Mexico at least until the conclusion of the 2015 – 2016 school year.

The fourth factor is “home of place of abode of the individual’s spouse, children, and

dependent parents, and where minor children attend school”. See Regulation 3.3.1.9 (C) (4) (d)

NMAC. Although Mr. Drahman alleged that he moved to Nevada at the beginning of 2016, it

was undisputed that Mrs. Drahman resided in New Mexico until she concluded her employment

with the District at the conclusion of the 2015 – 2016 school year. Mr. Drahman’s minor child

resided with Mrs. Drahman while she also concluded her schooling for the same school year. At

the conclusion of the school year, Mr. Drahman packed their belongings and relocated Mrs.

Drahman and Taxpayers’ minor child to Nevada. This factor supports the Department’s finding

In the Matter of Joel W. & Jacqueline R. Drahman
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that Taxpayers were residents of New Mexico at least through the conclusion of the 2015 – 2016

school year.

The fifth factor is the location of residence in prior years. See Regulation 3.3.1.9 (C) (4)

(e) NMAC. It was undisputed that Taxpayers were residents of New Mexico for more than 13

years prior to 2016. During this time, Taxpayers registered their automobiles in New Mexico,

maintained employment in New Mexico, and enrolled their children in school in New Mexico.

This factor supports the Department’s finding that Taxpayers were residents of New Mexico at

least until the conclusion of the 2015 – 2016 school year.

The sixth factor is “ownership of real property other than residences”. See Regulation

3.3.1.9 (C) (4) (f) NMAC. There was no evidence that the Taxpayer owned any real property

other than the residences in New Mexico or Nevada. This factor is neutral because it does not

weigh in favor of domicile in New Mexico or Nevada.

The seventh factor is the “location of transactions with financial institutions, including

the individual’s most active checking account and rental of safety deposit boxes”. See Regulation

3.3.1.9 (C) (4) (g) NMAC. There was no direct evidence presented on this issue. However, it is

reasonable to infer that Mrs. Drahman continued to conduct various transactions in New Mexico

while she continued to work and reside here. This factor supports the Department’s finding that

Taxpayers were residents of New Mexico at least until the conclusion of the 2015 – 2016 school

year.

The eighth factor is the location of club memberships and community affiliations. See

Regulation 3.3.1.9 (C) (4) (h) NMAC. There was no evidence presented relevant to this factor

which weighs neutrally between the parties.

In the Matter of Joel W. & Jacqueline R. Drahman
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The ninth factor is the address used to file federal tax returns. See Regulation 3.3.1.9 (C)

(4) (i) NMAC. Mr. Drahman did not seek to introduce Taxpayers’ tax returns despite the express

offer from counsel for the Department to permit Taxpayers to supplement the record. Mr.

Drahman politely declined. The Hearing Officer will note that the Return Adjustment Notice was

mailed to Taxpayers’ Nevada Property address. However, there is insufficient foundation upon

which to also infer that the Nevada Property address was utilized in filing federal or state income

tax returns. Because there is insufficient evidence relevant to this factor, it shall be weighed

neutrally between the parties.

The tenth factor is where one is registered to vote. See Regulation 3.3.1.9 (C) (4) (j)

NMAC. There was no evidence that the Taxpayer was registered to vote in New Mexico or in

Nevada. In fact, the evidence established that Mr. Drahman was not registered to vote in either

state, and had no intention of doing so. Therefore, this factor does not support a finding of

residence in New Mexico or Nevada.

The eleventh factor is where one has a driver’s license or professional license. See

Regulation 3.3.1.9 (C) (4) (k) NMAC. Mr. Drahman did not introduce evidence to establish if or

where he was licensed to drive in 2016, but Mr. Drahman admitted that he continues, even at the

present time, to own a vehicle which is registered in New Mexico and bears a New Mexico

license plate. This factor supports the Department’s finding that Taxpayers were residents of

New Mexico at least until the conclusion of the 2015 – 2016 school year.

The twelfth factor is residence for purposes of tuition, hunting licenses, and other official

purposes. See Regulation 3.3.1.9 (C) (4) (l) NMAC. There was no evidence presented on this

factor. Therefore, this factor does not support a finding of residence in New Mexico or Nevada.

In the Matter of Joel W. & Jacqueline R. Drahman
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The final factor is where items of personal, sentimental value are located. See Regulation

3.3.1.9 (C) (4) (m) NMAC. It was undisputed that at least through the conclusion of the 2015 –

2016 school year, that Mrs. Drahman and Taxpayers’ minor daughter maintained their personal

property in New Mexico. This factor supports the Department finding that Taxpayers were

residents of New Mexico.

Eight factors weigh in favor of the Department, five factors weigh neutrally, and zero

factors weigh in favor of the Taxpayer. A person’s declarations of intent are given weight, but

are not conclusive. See Regulation 3.3.1.9 (C) (4) NMAC. No one factor is conclusive, and

driver’s licenses, voter registrations and home addresses may be given less weight given the ease

with which they can be changed for tax purposes. See id. The most significant factors seem to be

the ones that deal with where and how a person spends the majority of their leisure time. See id.

Taxpayers demonstrated the intention to reside in Nevada at some period in the future.

However, the evidence failed to establish that Taxpayers changed their domicile until the

conclusion of the 2015 – 2016 school year, at the earliest. In the meantime, the amount of time

that Mr. Drahman spent in Nevada from January through May of 2016 was vague.

Mr. Drahman admitted he was rarely at the Nevada Property and he had no employment

obligations in Nevada. However, his spouse and minor child were continuously in New Mexico,

at least until conclusion of the school year. Taxpayers did not challenge the imposition of any

income tax attributable to Mrs. Drahman’s employment in New Mexico in 2016. Thus, the only

income subject of this protest was the compensation paid to Mr. Drahman in the first days of

2016, to which the evidence failed to establish that Mr. Drahman was not domiciled in New

Mexico.

In the Matter of Joel W. & Jacqueline R. Drahman
Page 15 of 18
Based upon the totality of the evidence, Taxpayers failed to establish an entitlement to

the refund subject of their protest. Taxpayers’ protest should be denied.

CONCLUSIONS OF LAW

A. Taxpayers filed a timely written protest to the Return Adjustment Notice issued

under Letter ID No. L1442682160, 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. Taxpayers were legal residents of New Mexico for several years prior to 2016 and

remained legal residents of New Mexico at least through the conclusion of the 2015 – 2016 school

year, because they failed to establish a change of residence prior to that time. See Hagan v.

Hardwick, 1981-NMSC-002, ¶ 11. See 3.3.1.9 (C) (4) NMAC. See Texas v. Florida, 306 U.S.

398.

D. Taxpayers did not meet their burden in this protest under Regulation 3.1.8.10

NMAC (8/30/2001) or establish entitlement to the claimed refund.

For the foregoing reasons, Taxpayers’ protest is DENIED.

DATED: January 9, 2018

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

In the Matter of Joel W. & Jacqueline R. Drahman
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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.

In the Matter of Joel W. & Jacqueline R. Drahman
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CERTIFICATE OF SERVICE

On January 9, 2018, a copy of the foregoing Decision and Order was mailed to the parties

listed below in the following manner:

In the Matter of Joel W. & Jacqueline R. Drahman
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