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TRD Notico of Intent to Assess SAMPLE-5.jpg
Circumstances that often cause the mismatch

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  • The business did not register with the Taxation & Revenue Dept. 

  • The business registered but did not file gross receipts tax reports.

  • The business did not do its homework. If it had, it would have discovered the requirements for business's doing business in New Mexico to report their gross receipts and pay gross receipts tax. 

  • The business is located outside of New Mexico and has customers in New Mexico. 

  • The business was operated by individuals who moved to New Mexico and are not familiar with the gross receipts tax.

  • The business omitted from its reports sales that were not subject to gross receipts tax.

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If you don't respond to the letter

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The audit letter gives you 60 days to provide the department with proof of your gross receipts that are not subject to gross receipts tax. If you don't respond, your will receive an assessment notice, which means the tax is a legal debt.

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As part of the audit letter there will be an offer for you to avoid penalties and interest by participating in a Managed Audit.

 

Related articles

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I received a letter telling me I owe gross receipts tax for prior years. What's this all about?

The letter is usually called Notice of Intent to Assess Gross Receipts Tax or Notice of Limited Scope Audit. It means you're being audited. It does not mean you already owe the tax.​

 

How did this happen?

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You got this letter because the N.M. Taxation & Revenue Dept. identified your business as not having filed gross receipts tax reports or filed reports but omitted some income.

They determined this by comparing the annual sales you reported to the IRS on your business income tax returns and 1099s your customers filed with the IRS, to the total gross receipts you reported to state for the year. A discrepancy indicates you may have underpaid your of gross receipts tax.

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Here is an example of the way the audit notice looks:​​​

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