{"data":{"id":"us-nm/7-1-29.1","jurisdiction":"us-nm","citation":"7-1-29.1","heading":"Awarding of costs and fees.","body":"A. In an administrative proceeding or court proceeding brought by or against a taxpayer and conducted in connection with the determination, collection or refund of a tax or the interest or penalty for a tax governed by the Tax Administration Act, the taxpayer shall be awarded a judgment or a settlement for reasonable administrative costs and reasonable litigation costs and attorney fees incurred in connection with the proceeding if the taxpayer is the prevailing party.\nB. As used in this section:\n(1) \"administrative proceeding\" means any procedure or other action before the department or the administrative hearings office;\n(2) \"court proceeding\" means any civil action brought in state district court;\n(3) \"reasonable administrative costs\" means:\n(a) any administrative fees or similar charges imposed by the department or the administrative hearings office; and\n(b) actual charges for: 1) filing fees, court reporter fees, service of process fees and similar expenses; 2) the services of expert witnesses; 3) any study, analysis, report, test or project reasonably necessary for the preparation of the party's case; and 4) fees and costs paid or incurred for the services in connection with the proceeding of attorneys, certified public accountants, employees of a New Mexico licensed certified public accounting firm or enrolled agents who are authorized to practice in the context of an administrative proceeding; and\n(4) \"reasonable litigation costs and attorney fees\" means:\n(a) reasonable court costs; and\n(b) actual charges for: 1) filing fees, court reporter fees, service of process fees and similar expenses; 2) the services of expert witnesses; 3) any study, analysis, report, test or project reasonably necessary for the preparation of the party's case; and 4) fees and costs paid or incurred for the services of attorneys in connection with the proceeding.\nC. For purposes of this section:\n(1) the taxpayer is the prevailing party if the taxpayer has:\n(a) substantially prevailed with respect to the amount in controversy; or\n(b) substantially prevailed with respect to most of the issues involved in the case or the most significant issue or set of issues involved in the case;\n(2) the taxpayer is not the prevailing party if the administrative hearings office finds that the position of the department in the proceeding was based upon a reasonable application of the law to the facts of the case. For purposes of this paragraph, the position of the department shall be presumed not to be based upon a reasonable application of the law to the facts of the case if:\n(a) the department did not follow applicable published guidance in the proceeding; or\n(b) the assessment giving rise to the proceeding is not supported by substantial evidence determined at the time of the issuance of the assessment;\n(3) as used in Subparagraph (a) of Paragraph (2) of this subsection, \"applicable published guidance\" means:\n(a) department or administrative hearings office regulations, information releases, instructions, notices, technical advice memoranda and announcements; and\n(b) private letter rulings and letters issued by the department to the taxpayer; and\n(4) the determination of whether the taxpayer is the prevailing party and the amount of reasonable litigation costs or reasonable administrative costs shall be made by agreement of the parties or:\n(a) in the case of an administrative proceeding, by the hearing officer; or\n(b) in the case of a court proceeding, by the court.\nD. An order granting or denying in whole or in part an award for:\n(1) reasonable litigation costs and attorney fees pursuant to Subsection A of this section in a court proceeding may be incorporated as a part of the court's decision or judgment and are subject to appeal in the same manner as the decision or judgment; and\n(2) reasonable administrative costs pursuant to Subsection A of this section in an administrative proceeding are reviewable in the same manner as a decision of the administrative hearings office.\nE. An agreement for or award of reasonable administrative costs or reasonable litigation costs in any administrative proceeding or court proceeding pursuant to Subsection A of this section shall not exceed the lesser of twenty percent of the amount of the settlement or judgment or seventy-five thousand dollars ($75,000).\nF. The department shall annually report to the legislative finance committee and the revenue stabilization and tax policy committee on the costs it incurs pursuant to this section.","path":["Chapter 7 - Taxation","ARTICLE 1 Administration"],"source_url":"https://nmonesource.com/nmos/nmsa-unanno/en/item/18507/index.do","current_through":"2026-07-01","vintage":"","retrieved_at":"2026-09-03T15:02:19Z","sha256":"93e53386bbf05534427e0b6e1f33e15f1db5b0ec04d9c8e83bec4a4b4607dfb3","source_id":"us-nm","stale":false,"prev":"us-nm/7-1-29","next":"us-nm/7-1-29.2"},"notice":"GroundRules: Original legal text. Not legal advice."}