New Mexico § 7-1-17.1 - Tax liability; spouse or former spouse

§ 7-1-17.1. Tax liability; spouse or former spouse

A. If the secretary or the secretary's delegate determines that, taking into account

the facts and circumstances in Subsections F and G of this section, it is inequitable

to hold a spouse liable for payment of all or part of any unpaid tax, assessment or

other deficiency for a tax, the secretary may decline to bring an action or proceeding

to collect such taxes from the spouse, including collection from the spouse's interest

in community property. B. The secretary or the secretary's delegate may grant innocent spouse relief to a

spouse who files a joint tax return and all or part of the spouse's portion of any

overpayment was, or is expected to be, applied to the tax liability for which the

spouse is not liable because the liability is determined to be separate debt, as defined

in Subsection A of Section 40-3-9 NMSA 1978 . C. If on review it is determined that the information relied on to make the innocent

spouse relief determination was incorrect or fraudulent, the department may rescind

the innocent spouse relief and proceed to collect the affected taxes from the spouse. D. Innocent spouse relief does not authorize the abatement of taxes or enforcement

of any provisions of the Tax Administration Act against the taxpayer. E. A lien or levy imposed on a spouse or property of a spouse who qualifies for innocent

spouse relief may be released as to taxes deemed inequitable to collect pursuant to

this section. F. If the federal internal revenue service granted the spouse relief pursuant to 26 U.S.C. Section 6015 , the spouse may request similar relief from the department on a form prescribed by

the department, regardless of whether the spouse is a joint or separate filer for

New Mexico income tax. The spouse shall provide a copy of the federal internal revenue service's determination

with the request that the secretary or the secretary's delegate cease collection activity

against the spouse to the extent relief was allowed by the federal internal revenue

service. The department shall grant innocent spouse relief for the same tax periods and tax

programs granted relief by the federal internal revenue service; provided that the

request for relief is submitted on the form prescribed by the department. The secretary or the secretary's delegate may decline to pursue collection activity

against a spouse while an application for relief is pending before the federal internal

revenue service, but the failure to seek or obtain relief shall not preclude the secretary

or secretary's delegate from declining to collect tax from a spouse when collection

would be inequitable. An item giving rise to a deficiency on a joint return shall be allocated to an individual

filing the return in the same manner as it would have been allocated if the individual

had filed separate returns for the taxable year. G. The secretary or the secretary's delegate shall consider at least the following

facts and circumstances when determining whether to grant innocent spouse relief if

the federal internal revenue service has not granted the spouse personal income tax

relief pursuant to 26 U.S.C. Section 6015 : (1) whether the spouse had knowledge of the tax liability at the time the liability

arose; (2) whether the spouse had a meaningful opportunity to contest the assessment of tax

at the time the assessment was made; (3) whether the spouse cooperated with the department in collection and compliance

efforts, to the extent the spouse had knowledge of collection and compliance efforts; (4) whether the state can protect its interests without pursuing active collection

efforts against the spouse, including collection efforts against the taxpayer; (5) whether the spouse benefited from the transfer of income, receipts or significant

amounts of property from the taxpayer; (6) whether the spouse participated in the business and financial decisions of the

household during the periods when the tax liability arose; (7) whether the spouse participated in operating a business with the taxpayer; (8) whether the spouse had responsibility for the finances of a business for which

the spouse participated; (9) whether the spouse had responsibility for payment of taxes for a business for

which the spouse participated; and (10) whether the spouse knew that the taxpayer engaged in business. H. No one factor contemplated to Subsection G of this section shall be considered

determinative in considering whether tax collection from a spouse would be inequitable. Each factor may be given different relative weight, depending on the facts and circumstances

presented; therefore, the presence of a majority of factors considered tending to

support innocent spouse relief in a particular case may not necessarily indicate that

the spouse in question qualifies for innocent spouse relief for New Mexico tax purposes. I. The secretary shall adopt and promulgate regulations as necessary for making the

determinations pursuant to this section. J. As used in this section: (1) “ innocent spouse relief ” means the relief from collection of tax liabilities pursuant to this section; (2) “ spouse ” means a current or former spouse of a taxpayer; and (3) “ taxpayer ” means a taxpayer who is or was married to a spouse who is seeking innocent spouse

relief pursuant to this section.