SANTA FE, NM – Today, MALDEF and its co-counsel announced that three New Mexico state legislators have filed a request to join a lawsuit to block the New Mexico Taxation and Revenue Department and Secretary Demesia Padilla (collectively, “TRD”) from continuing to unlawfully withhold millions of dollars from immigrant taxpayers who use federal Individual Tax Identification Numbers (“ITINs”) to file their returns. The legislators include the Honorable Gerald Ortiz y Pino, New Mexico State Senator; the Honorable Richard Martinez, New Mexico State Senator; and the Honorable Miguel P. Garcia, New Mexico State Representative. The law firm of Freedman, Boyd, Hollander Goldberg Urias & Ward, P.A., and the New Mexico non-profit organization, Somos Un Pueblo Unido, are co-counsel in the case.
“The Taxation and Revenue Department has usurped the authority of New Mexico lawmakers by creating a discriminatory policy never reviewed or approved by the legislature,” said MALDEF Southwest Regional Counsel, Marisa Bono. “We look forward to representing these elected officials as they seek to restore balance to the separation of powers.”
Earlier this month MALDEF and its co-counsel requested an injunction in state district court to temporarily halt the arbitrary policy enacted by TRD in 2012, until two pending lawsuits, originally filed in February of 2015, are resolved. Prior to the implementation of TRD’s discriminatory policy, 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 state income tax returns. But 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 a refund.
“Our state has a long and successful tradition of enacting policies that integrate immigrants rather than alienate them,” said Sen. Gerald Ortiz y Pino (D-12), chairman of the Senate Public Affairs Committee. “Immigrants contribute greatly to our state’s economy and their U.S. citizen children are integral to New Mexico’s future. By targeting these mixed status families who are simply trying to pay their taxes, this administration is worsening the lives of all New Mexicans. This program, concocted without the Legislature’s approval and behind closed doors, shows once again that this administration is about stealth and overreach.”
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 immigrants who are not eligible for a social security number. They must file using an ITIN.
“For this administration to arbitrarily implement such sweeping tax policy without the Legislature is unconscionable and unconstitutional,” said Representative Miguel P. García (D-14), member of the House Ways and Means committee. “The Governor is usurping the power of the Legislature in her quest to punish immigrant families and push them further into the shadows while jeopardizing the integrity of our tax code.”
Under federal regulations, the IRS only issues ITINs to individuals who are foreign 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 or because they use an ITIN.
Plaintiffs in both pending lawsuits have sued the New Mexico TRD for violating the TAA, for violating separation of powers by creating a program not authorized by the legislature, and for denying equal protection and due process rights to Plaintiffs in violation of the state constitution.
“This is not the first time the Taxation and Revenue Department has implemented policies that target and punish immigrant families,” said Gabriela Ibañez Guzmán, Staff Attorney for Somos Un Pueblo Unido. “In 2011, the Department launched a driver’s license re-verification program, which a judge later blocked and declared unconstitutional. It is unfortunate that this administration has spent six years trying to isolate our community instead of creating policies and programs that maximize the contributions and potential of immigrant workers in the state.”