New Mexico Back Tax Relief Guide: Resolve NM Tax Problems

Like the IRS, the New Mexico Taxation and Revenue Department (TRD) is responsible for collecting all income taxes owed at the state level. When a resident has an outstanding tax liability as a result of not filing or non-payment, he or she is encouraged to contact the TRD to create a plan for resolving the liability. The Taxation and Revenue Department is proactive in assisting taxpayers who owe back taxes and you shouldn’t be afraid to reach out if you need help. Listed below are several options for eliminating your New Mexico back taxes owed.

Establishing a Payment Plan

Ideally, you should pay any and all taxes owed in full at the time you file your return but the Taxation and Revenue Department recognizes that this isn’t always possible. Taxpayers who need more time to pay can work with the TRD to set up a payment plan. You can set up a short-term or long-term plan, depending on your budget and how much you owe. Short-term plans are designed to last 12 months or less while a long-term plan can be extended for up to 60 months.

If you’re setting up a long-term installment agreement, the Taxation and Revenue Department will place a lien on any property you own as security. Depending on your income and your other liabilitys, you can make equal payments throughout the repayment period or pay based on an increasing payment scale. If you have seasonal income, you can also make fluctuating payments based on the funds you have available. To discuss your options for a payment plan, you can call the Taxation and Revenue Department’s Santa Fe office at (505) 827-0700.

New Mexico Offer in Compromise (Only Doubt as to Liability)

TRD has an Offer In Compromise option but only for taxpayer’s who doubt their liability. It is not based on any financials or approved for taxpayers who cannot pay in full. The TRD assesses penalties and interest against taxpayers who owe back taxes. In some cases, the penalties and interest can prevent you from making any real progress on paying down the taxes owed. Under the New Mexico Taxpayer Bill of Rights, residents have the right to seek an offer in compromise with the TRD to settle a taxes owed.

Offers must be submitted to the Revenue Department in writing and you should be prepared to offer evidence as to why a compromise is appropriate. For example, you can request a compromise if you don’t believe you’re liable for the full amount of tax owed. When an offer in compromise is accepted, you make a lump-sum payment and the remaining tax balance is forgiven.

Requesting a Penalty Waiver

The Taxpayer Bill of Rights also allows residents to request an abatement of penalties associated with an outstanding taxes owed. Requests for penalty abatement must also be submitted in writing to the Taxation and Revenue Department. Generally, the TRD does not assess a penalty if you can prove that your failure to pay the taxes owed was the result of a mistake made in good faith. Keep in mind, however, that while you may be able to waive penalties on taxes owed, the TRD does not allow for the waiver of interest.

Our Simple Tax Relief Process