What happened after Shaun Holguin supplied records that caused the Department to abate his 2010 personal income tax assessment without telling the AHO?

Plain-English summary

Shaun Holguin was not liable for the assessed 2010 personal income tax, penalty, or interest. He supplied the requested records after the hearing, and the Department fully abated the assessment. Because the Department did not tell the AHO, an incorrect decision was issued and published; this amended decision withdrew and replaced it.

The September 2017 assessment consisted of:

• $1,164 personal income tax;
• $232.80 penalty; and
• $246.66 interest.

The Department's IRS tape-mismatch program had detected no filed New Mexico return for 2010. Holguin believed he had filed but could not produce records at the January 2018 hearing.

The record remained open for Holguin's documents

At the Department attorney's suggestion, the AHO kept the record open for 60 days. The Department said the documents could resolve the case and promised to notify the AHO if it made an adjustment.

Holguin supplied the records within days. During the post-hearing period, the Department issued a notice fully abating the tax, penalty, and interest.

The Department did not notify the AHO that it had made the adjustment.

The communication failure produced an incorrect public decision

Unaware of the abatement, the AHO issued a final decision on April 30, 2018 incorrectly finding Holguin liable. That decision was published on the Department's website.

On May 9, Holguin left the hearing officer an unsolicited voicemail explaining that he had submitted the records and received a formal abatement notice.

The voicemail was placed in the record and promptly disclosed to the Department under the rule governing unsolicited ex parte communications.

The AHO ordered the Department to respond within seven days, address whether Holguin's account was accurate, and say whether the April 30 decision should be withdrawn or amended. The Department did not answer those questions.

Under Regulation 22.600.3.17(A) NMAC, the hearing officer inferred from the nonresponse that Holguin's allegations were correct and that the Department agreed the original decision needed to be withdrawn.

A late withdrawal form did not fix the published ruling

The Department filed a withdrawal-of-protest form on May 14. The AHO found it untimely because a final decision had already resolved the protest.

The form also did not address the incorrect decision that remained publicly available.

The AHO admonished the Department to promptly communicate future abatements in cases that had been heard and remained under advisement. It ordered the Department to remove the original decision from its website and replace it with this amended decision.

Result: protest GRANTED. Holguin owed none of the assessed tax, penalty, or interest. The April 30 decision was withdrawn and replaced by the May 30, 2018 Amended Decision and Order.

What this means for you

Taxpayers submitting records after a hearing

Keep proof of delivery and every resulting adjustment notice. If an agency later issues an inconsistent ruling, those records can establish what happened while the matter was under advisement.

Tax agencies resolving a pending protest

Notify the adjudicating office immediately when post-hearing evidence causes an abatement or other adjustment. A private account change does not by itself correct an inaccurate public ruling.

Parties making an unsolicited contact

An unsolicited communication to the hearing officer must be added to the record and disclosed to the opposing party. Here that process allowed the accuracy problem to be addressed openly.

Readers researching D&O 18-14

Use the May 30 Amended Decision and Order. It expressly withdraws and replaces the incorrect April 30 decision.

Common questions

Q: What tax year was involved?
A: New Mexico personal income tax year 2010.

Q: Why did the Department assess Holguin?
A: Its IRS mismatch program indicated that he had not filed a New Mexico return for 2010.

Q: What happened after the hearing?
A: Holguin supplied the requested records within days, and the Department fully abated the tax, penalty, and interest.

Q: Why did the AHO initially rule against him?
A: The Department did not communicate the post-hearing abatement while the case remained under advisement.

Q: How did the AHO learn about the error?
A: Holguin left an unsolicited voicemail after receiving the incorrect April 30 decision.

Q: Did the Department dispute Holguin's account?
A: It did not answer the AHO's order asking it to confirm, deny, or clarify the account.

Q: What did the amended decision order?
A: It granted the protest, withdrew the original decision, and ordered the original removed from the website in favor of the amended ruling.

Citations and references

Statutes and regulations:

• NMSA 1978, §§ 7-1B-1 through 7-1B-9, including § 7-1B-8.3(B) — independent AHO and hearing timing
• NMSA 1978, § 7-1-8 — public decision and order
• Regulation 22.600.2.16(D) NMAC — disclosure of unsolicited ex parte communication
• Regulation 22.600.3.17(A) NMAC — inference based on failure to respond

Source

• Listing: New Mexico Decisions & Orders
• Decision post: Shaun E. Holguin
• Decision PDF: D&O 18-14

Original ruling text

STATE OF NEW MEXICO
ADMINISTRATIVE HEARINGS OFFICE
TAX ADMINISTRATION ACT

IN THE MATTER OF THE PROTEST OF
SHAUN E. HOLGUIN
TO ASSESSMENT ISSUED UNDER
LETTER ID NO. L1841111856

v. D&O No. 18-14

NEW MEXICO TAXATION AND REVENUE DEPARTMENT

AMENDED DECISION AND ORDER

A decision and order in this matter was issued April 30, 2018. Shortly after the issuance of

that decision and order, on May 9, 2018, Shaun E. Holguin (“Taxpayer”) left an unsolicited voice

message with the undersigned hearing officer complaining that he did not understand the purpose

of the decision and order, as he had provided the requisite documents to the State of New Mexico

Taxation and Revenue Department (“Department”) 1 during the post-hearing submission period

while this matter was still under advisement, and that as a result, the Department had fully abated

the assessed tax (a fact that this amended decision and order makes clear was never communicated

to the Administrative Hearings Office). That voicemail was made part of the record and promptly

disclosed to the Department on May 10, 2018. See 22.600.2.16 (D) NMAC (unsolicited ex parte

communication shall be promptly disclosed, and does not constitute a prohibited ex parte

communication).

By May 10, 2018 order, the Department was given seven-days to respond to Mr. Holguin’s

allegations and to indicate whether the final decision and order issued in this matter on April 30,

1
The Administrative Hearings Office is a separate, independent agency from the Taxation and Revenue Department
under the Administrative Hearings Office Act, NMSA 1978, Section 7-1B-1 through 9 (2015).
2018 should be withdrawn or amended. As of the date of this amended decision and order, the

Department has failed to respond to the two specific issues identified in that order.

As such, the undersigned hearing officer pursuant to Regulation 22.600.3.17 (A) NMAC

infers that the allegations Mr. Holguin in the voicemail were correct. The previous decision and

order issued in this matter on April 30, 2018 is withdrawn in favor of this amended decision and

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

FOLLOWS:

FINDINGS OF FACT

1. On September 29, 2017, under letter id. no. L1841111856, the Department

assessed Taxpayer for $1,164.00 in personal income tax, $232.80 in penalty, and $246.66 in

interest for the personal income tax year ending December 31, 2010.

2. On October 11, 2017, Taxpayer protested the Department’s assessment.

3. On November 7, 2017, the Department’s protest office acknowledged receipt of a

valid protest.

4. On November 29, 2017, the Department filed a request for hearing in this matter

with the Administrative Hearings Office, an agency independent of the Taxation and Revenue

Department.

5. On November 30, 2017, the Administrative Hearings Office sent Notice of

Administrative Hearing, scheduling this matter for a merits hearing on January 8, 2018.

6. The January 8, 2018 hearing occurred within 90-days of the Department’s

acknowledgment of receipt of a valid protest.

7. Taxpayer worked for the Veterans Affairs Hospital in Albuquerque beginning in

2008 and through the relevant 2010 personal income tax year.

In the Matter of the Protest of Shaun E. Holguin, page 2 of 8

8. Through its tape mismatch program with the IRS, the Department detected that

Taxpayer did not file New Mexico personal income tax returns for 2010.

9. In light of the mismatch, the Department initiated a limited scope audit of

Taxpayer regarding personal income tax year 2010.

10. Taxpayer believed that he did file his New Mexico 2010 personal income tax

return, however he did have records dating back to 2010 and could not provide proof of filing his

returns at the time of the hearing.

11. The evidentiary merits hearing in this matter occurred on January 8, 2018.

12. At the suggestion of the Department’s attorney of record, Peter Breen, during the

evidentiary merits hearing, at the end of the merits hearing the matter was taken under

advisement and the record was left open for 60-days after the hearing for Taxpayer to produce

the records in question, which the Department indicated could resolve this matter. [01-08-18 CD

31:25-32:23].

13. In discussing taking the matter under advisement for submission of additional

records at the close of the hearing, the Department’s counsel Mr. Breen stated on the record that

“…if they have those kinds of records, we could make the adjustment, no offense, faster than

you’d be able to [rule] and we [the Department] would let you know if we did make that

adjustment.” [01-08-18 CD 35:05-35:31].

14. Taxpayer did in fact produce the records in question within days of the conclusion

of the hearing to the Department. [Unrefuted Voice Message of Taxpayer].

15. During the post-hearing submission period, the Department issued a notice of

abatement of the assessed tax, penalty and interest against Taxpayer. [Unrefuted Voice Message

of Taxpayer].

In the Matter of the Protest of Shaun E. Holguin, page 3 of 8

16. Despite Mr. Breen’s assertion on the record that it would inform the

Administrative Hearing Office of any adjustments it made, the Department failed to provide any

notice of such abatement, or other similar notification of the adjustments, to the Administrative

Hearings Office that Taxpayer had submitted the documents discussed at hearing that resulted in

an abatement despite the fact that the matter remained under advisement before the

Administrative Hearings Office.

17. On April 30, 2018, as a result of the Department’s failure to communicate that it

issued a notice of abatement during the post-hearing submission period when the matter

remained under advisement with the Administrative Hearings Office, the Administrative

Hearings Office issued a final, public decision and order unknowingly but incorrectly finding

Taxpayer liable for taxes that the Department determined he did not owe.

18. The decision and order finding Taxpayer liable for an assessed tax was published

to the Department’s website and remains available to this very day. See

http://www.tax.newmexico.gov/uploads/files/18-14_Shaun%20E%20Holguin.pdf (accessed on

May 29, 2018).

19. On May 9, 2018, Taxpayer called the undersigned hearing officer and left an

unsolicited voice-message indicating he was confused about the decision and order because he

had submitted the required documents to the Department shortly after the hearing and that the

Department issued a formal notice of abatement of the assessed tax to him resolving the matter.

That voice-message was saved into the record of this proceeding.

20. On May 10, 2018, the undersigned hearing officer issued an order directing the

Department to specifically respond within seven days to Taxpayer’s allegations, either

In the Matter of the Protest of Shaun E. Holguin, page 4 of 8
confirming, denying, or clarifying their accuracy and addressing whether the final decision and

order issued in this matter should be withdrawn in favor of an amended decision and order.

21. The Department did not file a response addressing those two questions within

seven days.

22. On May 14, 2018, the Department filed a withdrawal of protest form in this

matter. However, since a final decision and order in this matter had already been issued

resolving the underlying protest, there was no protest that could be withdrawn and the

withdrawal was untimely. Nor does the untimely filing of a withdrawal of protest address the

issue that because of the Department’s failure to communicate, an incorrect final decision and

order in this matter was issued that remains publicly available on the Department’s website.

DISCUSSION

The previous decision and order in this matter is withdrawn in favor of this amended

decision and order. Taxpayer was not liable for any assessed tax in this matter, based on the

Department’s uncommunicated post-hearing notice of abatement of tax while this matter

remained under advisement. Because the Department failed to communicate that Taxpayer had

in fact paid the taxes in dispute, despite Mr. Breen’s clear statement on the record that the

Department would inform the Administrative Hearing Office if it made any adjustments, the

final public decision and order unknowingly but incorrectly indicated that Taxpayer failed to

meet his tax liabilities. The Department is admonished in the future to promptly communicate

any abatement it makes in a case heard and under advisement before the Administrative Hearings

Office. The Department IS ORDERED to remove the original decision and order from its

website in favor of this amended decision and order. Taxpayer’s protest IS GRANTED.

In the Matter of the Protest of Shaun E. Holguin, page 5 of 8
CONCLUSIONS OF LAW

A. Taxpayer filed a timely, written protest to the Department’s assessment, 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 protest under NMSA 1978,

Section 7-1B-8.3 (B) (2015).

C. A final, public decision and order was issued in this matter on April 30, 2018

pursuant to NMSA 1978, Section 7-1-8, addressing the underlying protest.

D. Taxpayer left an unsolicited voice-message raising his concerns about the accuracy

of the decision and order issued in this case. That voice message was promptly disclosed to the

opposing party, as required under 22.600.2.16 (D) NMAC (unsolicited ex parte communication

shall be promptly disclosed, and does not constitute a prohibited ex parte communication).

E. The Department did not respond to the May 10, 2018 order requiring it to address

whether Taxpayer’s allegations were correct and whether the previous decision and order should be

withdrawn in light of those allegations. As such, pursuant to Regulation 22.600.3.17 (A) NMAC,

in the absence of Department response, it is inferred that the allegations Mr. Holguin in the

voicemail were correct and that the Department accedes that the decision and order needs to be

withdrawn.

F. The Department’s submission of withdrawal of protest filed on May 14, 2018 was

untimely because the protest had already been ruled upon with a final, public decision and order on

April 30, 2018.

G. Based on the Department’s uncommunicated notice of abatement of tax, Taxpayer

is not liable for the assessed tax and the previous decision and order issued pursuant to NMSA

1978, Section 7-1-8 is withdrawn in favor of this decision and order.

In the Matter of the Protest of Shaun E. Holguin, page 6 of 8
For the foregoing reasons, the Taxpayer’s protest IS GRANTED.

DATED: May 30, 2018.

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

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 the Protest of Shaun E. Holguin, page 7 of 8
CERTIFICATE OF SERVICE

On May 30, 2018, a copy of the foregoing Amended Decision and Order was submitted to

the parties listed below in the following manner:

First Class Mail Interoffice Mail

In the Matter of the Protest of Shaun E. Holguin, page 8 of 8