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Tax Law

New Mexico Court of Appeals Invalidates Refund-Claim Requirement Not Found In Statute

The New Mexico Court of Appeals held that a taxpayer’s refund claim was timely even though it did not comply with a requirement found in the Department of Revenue’s regulation.  Specifically, the court concluded that the Department’s regulatory requirement to provide a “fully completed amended return” was not required prior to the expiration of the statute of limitations, because the requirement was not part of the New Mexico statute.

Citing New Mexico Supreme Court precedent for the proposition that the Department may not impose additional requirements by regulation that would abridge or modify a statute, the court determined that the regulation at issue was invalid because the regulation’s sixth requirement has the effect of abridging the taxpayer’s right to pursue an otherwise timely refund claim.  The court noted that the hearing officer below did not address this case law, and instead evaluated the Department’s regulation based only upon its reasonableness.

Lastly, the court noted that the New Mexico Legislature subsequently amended the statute to include the amended-return requirement, with no indication that it intended the requirement to apply retroactively.

CIBL, Inc. & Subs. v. New Mexico Taxation & Revenue Dep’t, No. A-1-CA-37122 (Oct. 2, 2020)