New Mexico – Taxpayer Options for Protests and Claims for Refund

SALT Report 2825 – The New Mexico Taxation and Revenue Department updated its publication regarding the procedures that must be followed when disputing a tax liability or other administrative action.  Under the provisions of the New Mexico Tax Administration Act a taxpayer may dispute a liability or administrative action in one of two ways:

  • The taxpayer can file a written protest with the Department without making a payment. The protest must be filed within the specified time period and include all required information, or
  • The taxpayer can pay the disputed tax liability and then file a refund claim

If a taxpayer chooses to file a protest, they must do so within 90 days of the date of the event they are protesting. The written protest must include the taxpayer’s name, and either a social security number, a New Mexico CRS number, or a federal employer identification number.  The protest must also include the assessment number or letter identification number, the type of taxes involved, the grounds for the protest, a summary of the evidence the taxpayer will produce to support their claim, and the relief requested.

If the Department’s Protest Office does not agree with a taxpayer’s reason for protest, then a formal hearing will be scheduled. However, if the Department believes that the situation can be resolved without a formal hearing the Department may schedule an informal conference first. If the protest reaches the formal hearing stage, then the hearing officer will enter a decision and an order. At this point, either party may file an appeal of this decision and order with the New Mexico Court of Appeals.

If a taxpayer chooses to file a refund claim because they believe they have over paid tax or had more tax withheld than they actually owe, they can do so within three years from the end of the calendar year in which the tax was due or the assessment was paid. The Department will treat a protest of a denial or departmental inaction on a claim for refund in the same way as a protest of an assessment.

If a refund claim is subsequently denied, then the taxpayer can file a protest with the Department or file a lawsuit in the Santa Fe District Court. The taxpayer must do so within 90 days of the date the denial is mailed.  Failure to do so will result in the decision becoming final and the taxpayer will be barred from re-filing the claim.

The Department warns that choosing one option is an automatic waiver of the right to pursue the other option.

For Further Information

New Mexico Taxation and Revenue Department – FYI-402 Taxpayer Remedies