In the Matter of the Protest of Kevin St. John - No. 13-19 - Decision and Order

Sep 19, 2026

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Decision and order addressing Kevin St. John’s protest of New Mexico gross receipts tax assessments for the reporting period ending December 31, 2006. The hearing before the New Mexico Taxation and Revenue Department evaluated evidence from the Department’s IRS Tape Match mismatch, including Schedule C business income and state tax liability, and reviewed IRS forms and taxpayer-submitted exhibits. Findings analyze penalties, interest, 1099-MISC amounts, W-2 wage reporting, and timely NTTCs affecting nontaxable receipts.

LanguageEnglish

CategoryLetters

FormatPDF

Pages12

Reading Time4 min

AccessFree to download

Findings of Fact

Assessment and protest timeline

Income sources: 1099-MISC, W-2, and NTTCs

Reporting discrepancies and tax calculation basis

BEFORE THE HEARING OFFICER OF THE TAXATION AND REVENUE DEPARTMENT OF THE STATE OF NEW MEXICO IN THE MATTER OF THE PROTEST OF KEVIN ST. JOHN No. 13-19 TO ASSESSMENTS ISSUED UNDER LETTER ID NO. L0252924490 DECISION AND ORDER A protest hearing occurred on the above captioned matter on July 2, 2013 before Brian VanDenzen, Esq., Tax Hearing Officer, in Santa Fe. Mr. Kevin St. John (“Taxpayer”) appeared pro se. Staff Attorney Peter Breen appeared representing the Taxation and Revenue Department of the State of New Mexico (“Department”). Protest Auditor Mary Griego appeared as a witness for the Department. Taxpayer Exhibits \#1-4 and Department Exhibits A-D were admitted into the record. All exhibits are more thoroughly described in the Administrative Exhibit Log. The undersigned Hearing Officer also reviewed and printed out IRS Form 1040 (2006), IRS Form 1040, Schedule C (2006), and IRS 2006 Instructions for Schedule C (2006), which are included in the administrative record for reference. Based on the evidence and arguments presented, IT IS DECIDED AND ORDERED AS FOLLOWS: FINDINGS OF FACT 1. On November 30, 2010, the Department assessed Taxpayer $497.64 in gross receipts tax principal, $99.52 in penalty, and $156.89 in interest for a total assessment of $754.05 for the reporting period ending December 31, 2006. [[Letter id. no. L0252924480](Letter id. no. L0252924480)]. 2. On December 3, 2010, Taxpayer filed a written protest of the assessment. 3. On January 18, 2011, the Department acknowledged receipt of Taxpayer’s protest. 4. On May 21, 2013, the Department requested a hearing in this matter. 5. On May 22, 2013, the Hearing Bureau issued Notice of Administrative Hearing, scheduling this matter for July 2, 2013. 6. In 2006, Taxpayer worked both as an employee in the film and ski industries, and as an independent contractor in the film industry. [Taxpayer Ex. 1; Taxpayer Ex. 3; 07-02-13 CD 06:00-07:32; 07-02-13 CD 23:57-24:22] . 7. The assessment in this matter originated from the Department’s Tape Match program with the IRS. Under that program, the Department detected a mismatch between Taxpayer’s reported 2006 IRS Schedule C business income of $23,630.00 and Taxpayer’s reported New Mexico gross receipts tax liability of $0.00. [Department Ex. B; 07-02-13 CD 25:20-49] . 8. The Department sent Taxpayer “Notice of Limited Scope Audit CommencementSchedule C Gross Receipts” on January 13, 2010. This Notice informed Taxpayer of the $23,630.00 discrepancy between his Schedule C and State gross receipts tax information.[Department Ex. B; 07-02-13 CD 39:20-39:58] . 9. In response to the Notice of Limited Scope Audit, Taxpayer provided the Department three 2006 1099-MISCs, five 2006 W-2s, and two nontaxable transaction certificates (“NTTCs ofNTTC”) . [07-02-13 CD 25:49-26:02]. 10. Taxpayer provided the following 2006 1099-MISCs totaling $18,206.41 to the Department: a. Creative Services, Inc., for $3,645.63 . [Taxpayer Ex. 1.1] . b. Southwest Productions, Inc., for $12,960.78 . [Taxpayer Ex. 1.2] . c. Mills/James Productions, for $1,600.00 . [Taxpayer Ex. 1.3] . In the Matter of the Protest of Kevin St. John, page 2 of 12 11. Taxpayer proved the following NTTCs to the Department: a. Type 16 NTTC executed by Southwest Productions, Inc. on October 1, 1999. [Taxpayer Ex. 2.1] . b. Type 16 NTTC executed by Creative Services, Inc. on April 1, 1997.[Taxpayer Ex. 2.2] . 12. In light of Taxpayer’s presentation of timely executed NTTCs, the Department accepted that Taxpayer’s receipts from Southwest Productions, Inc. and Creative Services, Inc. were nontaxable. Therefore, the assessed gross receipts tax did not include the $16,607 in total receipts from those two companies and only imposed gross receipts tax on the remaining $7,023.00 in business income that Taxpayer listed on his IRS Schedule C. [Department Ex. C; 07-02-13 CD 25:40-26:37; 07-02-13 CD 39:49-40:22] . 13. Taxpayer provided the D

FAQs

What tax assessment is being protested, and for which reporting period?

The Department assessed gross receipts tax principal, penalty, and interest for the reporting period ending December 31, 2006, totaling $754.05.

What caused the Department to initiate the assessment process?

The assessment originated from the Department’s IRS Tape Match program, which detected a mismatch between the taxpayer’s 2006 Schedule C business income and reported New Mexico gross receipts tax liability.

How did NTTCs affect the tax treatment of certain receipts?

The Department accepted timely executed NTTCs, concluding that receipts from Southwest Productions, Inc. and Creative Services, Inc. were nontaxable, so gross receipts tax applied only to remaining business income listed on Schedule C.

Sep 19, 2026

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