New Mexico Announces Tax Amnesty Program

On November 8, 2018, the New Mexico Taxation and Revenue Department announced a tax amnesty program – the New Mexico Fresh Start Program – that will run through December 31, 2018. The amnesty program is intended for small businesses and individuals with unreported or underreported taxes. Qualified taxpayers will have penalties and interest on overdue taxes waived if they finalize enrollment in the program by December 31, 2018 and pay the liabilities within 180 days. If taxpayers do not pay their tax assessment within 180 days, they will be assessed interest for the remaining tax due. In order to determine eligibility for the program, the Department will use the following criteria:

• The taxpayer demonstrates a willingness and ability to comply with New Mexico’s tax laws;
• The taxpayer demonstrates an acceptable system of internal controls and business records (for most taxpayers, this may be income identified on the federal return and/or business income in New Mexico);
• The taxpayer’s resources are available to conduct the income disclosure

Taxpayers will not be eligible if any of the following criteria apply:

• A tax liability has already been established for the periods in question;
• The Department has notified the taxpayer that the periods in question are currently under audit;
• The Department is currently pursuing collections on the taxpayer for the periods in question;
• The taxpayer is already in a legal dispute with the Department over the taxability of transactions for the periods in question;
• The periods in question were part of a criminal investigation.

There is no specific mention by the state of any specific lookback period but New Mexico has a 3 year statute of limitation for when the tax payment was due. Additionally, there is no specific instructions on who qualifies as a small business. A taxpayer may approach the Department anonymously to ask if a certain situation meets general rules by calling the hotline at (505) 841-6216. For details and to apply for the program, visit the New Mexico Fresh Start Program webpage. (Press Release, New Mexico Taxation and Revenue Department, November 8, 2018)