State Illegally Withholding Millions from Immigrant Taxpayers Who Use Individual Tax ID Numbers to File

SANTA FE, NM - Today, MALDEF filed two lawsuits in state district court against the New Mexico Taxation and Revenue Department and Secretary Demesia Padilla (collectively, "TRD") for unlawfully withholding millions of dollars from immigrant taxpayers using federal Individual Tax Identification Numbers ("ITINs") to file their tax returns. The law firm of Freedman, Boyd, Hollander Goldberg Urias & Ward, P.A., and the United Workers Center of NM, are co-counsel in the case.

New Mexico state law requires all eligible New Mexico residents to file a personal income tax return, regardless of their work or immigration status. The law also requires a taxpayer identification number on all returns, and while many individuals choose to provide their social security number to comply, that option is not available for certain foreign nationals who are not eligible for a social security number. They must file using an ITIN.

"The State has once again trampled on the constitutional rights of New Mexican immigrants," stated MALDEF Southwest Regional Counsel David Hinojosa. "But these brave plaintiffs have the law and the constitution on their side and intimidation tactics such as these will now be countered in the courts."

Prior to 2012, New Mexico taxpayers who were ineligible for a social security number used their IRS-assigned federal ITIN to comply with the law and file their returns. But, in 2012, the New Mexico TRD instituted an arbitrary policy of denying tax refunds to immigrant residents who file returns using their ITINs. Today, these immigrant residents receive a letter from the state noting "discrepancies" on their returns and unlawfully requiring supporting documents within a thirty-day period for the return to be processed. In 2014, the state reported it had sent nearly 15,000 such letters since the policy was implemented in 2012. And, in some cases, immigrant residents filing state taxes with an ITIN are double-taxed. Plaintiffs Gladys Cobos, Roberto Sanchez, and unnamed Doe Plaintiffs each timely filed their returns, and each was denied refunds.

"This policy is part of a disturbing pattern by Governor Martinez's administration to single out and punish hard working immigrant families who have established deep roots in New Mexico," said, Gabriela Ibañez Guzmán, staff attorney, Somos Un Pueblo Unido. "Discriminating against immigrants and withholding their hard earned money negatively impacts their U.S. born children and local economies. It also discourages more immigrants from reporting their income and filing their taxes-revenue that our poverty stricken state needs."

Under federal regulations, the IRS only issues ITINs to individuals who are not U.S. citizens or nationals. No provision in the Tax Administration Act ("TAA") or any other state law permits the refusal to process tax returns or withhold income tax refunds by requiring additional documentation from the taxpayer because of their status as a foreign national.

Plaintiffs have sued the New Mexico TRD for violating the TAA, for creating a program not authorized by the legislature and thereby violating its separation of powers duty, and denying equal protection and denying due process rights to Plaintiffs in violation of the state constitution. MALDEF and its co-counsel seek to block these unlawful and discriminatory practices, and to recover the refunds owed by the TRDO to the law-abiding individuals who earned the money through their hard work and overpaid their taxes.

A copy of the complaint in this case is available here and here.

Founded in 1968, MALDEF is the nation's leading Latino legal civil rights organization. Often described as the "Latino Legal Voice for Civil Rights in America" MALDEF promotes social change through advocacy, communications, community education, and litigation in the areas of education, employment, immigrant rights, and political access. For more information on MALDEF, please visit:

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