New Mexico State Tax and SOL

[Kidsmoke]

I moved out of New Mexico in September 2000. I failed to file a state tax return for 2000 with the state (partial year resident). Today I received a collection letter from EOS CCA in Ma.

This is the first notice I've received from anyone regarding this debt. I believe SOL for non filers in NM is 7 years, for fraud it's 10. Wouldn't I be past the SOL with this debt? If so I'll just respond with a "past SOL and cease and desist contact" letter.

[WhoCares1000]

Usually for most income tax situations, there is not an SOL for not filing. The SOL only applies to those who have filed but not paid. I would send a C&D to the collector and then deal with the NM Department of Revenue (or whatever they call it there) personally. Most will work with you to get the form filed rather than using the one they filled out for you (which usually results in a higher tax anyways) and then deal with the tax you owe (or you might even be due a refund).

[1stStep]

Also many states have declared "fiscal emergencies" allowing them to set aside any SOLs when it comes to collecting taxes... the great broke state on the west coast is one of them...

[Kidsmoke]

Thanks for the replies. I'll go the c&d letter route and try to work with the state taxation department.

The crazy thing is, it would've been a small refund. My rewards for being lazy.

[WhoCares1000]

If you were due a small refund, that you at least do not owe any taxes. In most states, you can file a actual tax form to take the place of the filing the state did for you. Now the SOL might have run out on the refund so you cannot collect it but that is still better than owing them.

[Flyingifr]

The bad news for the OP is that no State's SOL starts until the tax return is filed. This applies to IRS also.

File the tax return. Do what you can to reconstruct your records.

[Kidsmoke]

Crazy. Called New Mexico Taxation and Revenue department, they looked and said it's actually for year 1999. I filed a return, they have it. They say there was some kind of discrepancy with a 1099 form filed with IRS. (Most likely sold some stock in 99 that I didn't report to NM).

Regardless, they said there was nothing they could do to work it out with me directly and state I need to work through the collection agency.

None of this shows on my credit at this time.

[Flyingifr]

Crazy. Called New Mexico Taxation and Revenue department, they looked and said it's actually for year 1999. I filed a return, they have it. They say there was some kind of discrepancy with a 1099 form filed with IRS. (Most likely sold some stock in 99 that I didn't report to NM).

Regardless, they said there was nothing they could do to work it out with me directly and state I need to work through the collection agency.

None of this shows on my credit at this time.

When was this tax assessed? Upon research I found that the Assessment and Collection SOL's for New Mexico are similar to IRS - 3 years from the end of the calendar year of the year the tax was due (in this case 31 December 1999 - it is the RETURN that was due in 2000, not the tax) for Assessent and 10 years from Assessment date for Collections.

If your return was filed on time, then if NM didn't assess on or before December 31, 2002 the Assessment is out of Statute. If they did assess on time then the CSED (Collection Statute Expiration Date) should expire on or before December 31, 2012 if it hasn't already expired. By my reckoning that is the end of next month. If you can sit on this until New Years you should be home free.

Before you panic do some research on the Assessment itself. There is a strong possibility the Assessment itself may violate NM law and be invalid, or the CSED may have expired. No wonder they want you to work it out with the CA - the CA doesn't care about SOL or CSED. The reason it doesn't show on your CRA file is because FCRA prohibits reporting it - it is OOS for Credit Reporting (7.5 years from Assessment Date). Reporting it would be another FDCPA violation (misrepresenting the nature of the debt) and a FCRA violation (re-aging).

If it is OOS or if the Assessment was made late and is therefore invalid you have a valid dispute with the CA and an immediate FDCPA violation the second they ask you for money.

Source: Statute of Limitations: Tax Assessments, Collections, Back Taxes | TaxationLawFirms.com

Assessment

The statue of limitations is 3 years from the end of the calendar year in which the tax was due. A taxpayer may dispute the assessment of tax or the denial of a refund by filing a written protest with the Department within 30 days of the mailing of the assessment.

Collection

The statute of limitations requires that collection be made within 10 years after the date of assessment .

Edited November 27, 2012 by Flyingifr

[Kidsmoke]

Thanks Flyingifr. Contacted Tax and Revenue department again and they said it was assessed in May of 2003. They say it's a 7 year SOL. Everything I see says 3 years.

I think I'll contact a tax attorney in NM and run it by them.

[Flyingifr]

Thanks Flyingifr. Contacted Tax and Revenue department again and they said it was assessed in May of 2003. They say it's a 7 year SOL. Everything I see says 3 years.

I think I'll contact a tax attorney in NM and run it by them.

If it is 7 years find out when it was changed. If it was changed after the 2003 Assessment they are still SOL.

Even if it was assessed in May 2003, the CSED expires in May 2013. Can you lay low for 6 months? They are in New Mexico and you are in Virginia - that makes collecting from you even harder. The debt is already OOS for credit reorting purposes, so no issues there. Your worrying is putting yourself just where they want you, which is exactly what you do NOT want to do.

BTW, on tax debts, payments do not extend the CSED unlike credit card and other debts where each payment extends the SOL for suit.

I suggest just ignoring them and stalling them for the next 6 months and let the clock take care of this matter for you.

Edited November 30, 2012 by Flyingifr

[Kidsmoke]

Was a major hassle trying to find a tax attorney (dealing with state tax law) in NM. Finally gave up and started digging through the NM statutes and found the answer! Although it's not the answer I was after.

 

7-1-18 . Limitation on assessment by department.  

A.   Except as otherwise provided in this section, no assessment of tax may be made by the department after three years from the end of the calendar year in which payment of the tax was due, and no proceeding in court for the collection of such tax without the prior assessment thereof shall be begun after the expiration of such period.   

 

 

According to the Taxation and Revenue legal department that means calendar year 2003.

 

When I asked about the SOL on collections they said 10 years, but advised me they'd most likely place a lien at the end of the year and that's when it would hit my credit. Or I could gamble and they don't.

[admin]

Especially if you are in Virginia, I think you are safe until this falls off.  They can't assess new taxes, and if the SOL is 10 years, you're almost done.  Unfortunately, this could stay on your credit report until it's paid, though.