How to Resolve Tax Debt in New Mexico

We can help you to resolve your Tax Debt in New Mexico along with any IRS debt that you might have.

The New Mexico Department of Taxation has just one way to resolve your state tax debt, aside from paying your balance due in full. To resolve outstanding tax debt with the State of NM, you will need to enter into an installment agreement or payment plan. A payment plan is a contract between you, the taxpayer, and the NM Taxation and Revenue Department. When a payment plan has been accepted and is current, the State of NM will not actively seek collection. Collection activities for individuals include:

  • Wage garnishment

  • Levies to seize your assets including your car.

Business owners, who are under a payment plan, can also be immune from collection actions such as:

  • Having their business closed by the state, or

  • Having business assets seized.

The NM Tax and Revenue Department offers two types of installment agreements that will allow you to pay your tax debt over time via a payment plan. The two types of plans are:

  • A Short Term Plan - Allows you to pay your tax debt in 12 months or less. When you enter into this type of a plan, the State of New Mexico will normally not file a State Tax Lien against you.

  • Longer Term Installment Agreement - If you are not able to pay your full tax debt within a 12 month period, under the Short Term Payment Plan, then you may have the opportunity to pay down your debt over a period of up to 72-months. When you enter into this type of a plan, a State Tax Lien will normally be filed against you.

As with any installment agreement, whether it be State or Federal (IRS), we feel that is important to work with a tax resolution expert as, such as our firm. The reason is, the State and IRS are in the business of collecting the tax you owe as quickly as possible and the determination of how quickly they think you can pay is determined by your application for the installment agreement. In or experience, the State and the IRS generally think you can live on next to nothing while paying off your tax debt. When you hire us, our job is to put together a Properly Structured installment plan - one that:

  • You can afford on a monthly basis,

  • That you can see through to the end, and

  • One that more accurately matches your actual living expenses.

Think of it this way:

Do you want to control your cash flow, or would you rather the government control your cash flow?

In New Mexico, there are also other items to be aware of when structuring your installment agreement. We think you should also know that the State:

  • May require you to provide them with your personal financial information that details your assets and monthly income - this is something we help you with by presenting your cash flow in the most favorable manner allowed by law.

  • May require you to apply for a loan (and then be denied for the loan) before New Mexico Tax and Revenue will approve a monthly payment plan.

Luckily, the State is fairly flexible with how payments can be structured. The options include:

  • Equal payments over the length of the installment agreement,

  • Fluctuating payments, for those with seasonal income,

  • The ability to increase payments at points throughout the agreement when you might have additional funds or have paid off other debt.

It's also important to understand that the State of New Mexico Taxation and Revenue Department will:

  • Terminate the payment plan and may proceed with collection actions, if a payment is missed, you have new tax debt, or if you do not file your required returns.

  • Continue to assess penalties and interest while the plan in in effect.

  • Make a record of your installment agreement available, for public inspection, when the payment plan is greater than $1,000.

Unfortunately, an Offer in Compromise (an agreement between the taxpayer and the government that reduces the amount owed) is not available in New Mexico, nor are partial payment installment plans. However, if you also owe Federal taxes to the IRS, we can explore the possibility of proposing an offer in compromise for your IRS debt.

Schedule a free consultation today to discuss your options by calling 505-353-9610 or by clicking here.