New Mexico offers delinquent taxpayers a fresh start

New Mexico offers delinquent taxpayers a fresh start

From now through December 31, 2018, the New Mexico Taxation and Revenue Department (TRD) will forgive applicable penalties and interest for New Mexico taxpayers who successfully participate in the New Mexico Fresh Start Program. The recently launched program offers tax amnesty for small businesses and individual taxpayers with underreported or unreported New Mexico taxes.

To succeed, taxpayers must finalize enrollment in the program by December 31, and fully pay the taxes they owe within 180 days.

Self-audits

Before they can benefit from the Fresh Start Program, taxpayers need to figure out if they have any outstanding tax liabilities. The TRD is encouraging taxpayers to conduct self-audits, “either alone or with the guidance of a Department Auditor, to determine tax due.”

Once determined, taxpayers must provide proof of tax due to a TRD auditor. If the TRD accepts it, it will issue a tax assessment to the taxpayer, excluding the penalties and interest that would normally apply.

Eligibility

Not all taxpayers are eligible for the Fresh Start Program. To qualify, taxpayers must:

  • Demonstrate a willingness and ability to comply with New Mexico tax laws
  • Demonstrate a system of internal controls and business records that are acceptable to the Department
  • Have the resources needed to conduct the income disclosure

The program is closed to taxpayers currently being pursued by the TRD for outstanding tax liability for the period in question, as well as taxpayers that:

  • Have been, or currently are, under a criminal tax investigation
  • Have already been contacted by the TRD about an outstanding tax liability for the periods in question
  • Are already in a legal dispute with TRD “over the taxability of transactions that would be included in the program”
  • Are currently under audit, or already assessed, for the included periods

Additional information is available from the New Mexico Taxation and Revenue Department.

Tax amnesty programs can be a wonderful opportunity for taxpayers with outstanding tax liability. If you’re curious about whether participation in a tax amnesty program is right for you, speak with a trusted tax advisor. The team at Avalara Professional Services can help.

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