JUDGE RULES AGAINST NEW MEXICO TAXATION AND REVENUE DEPARTMENT: LAWSUIT FOR UNLAWFULLY WITHHOLDING MILLIONS FROM IMMIGRANT TAXPAYERS MOVES FORWARD
September 23, 2015
SANTA FE, NM--On Wednesday, State District Court Judge David Thomson rejected a motion by the New Mexico Taxation and Revenue Department ("NMTRD") and Secretary Demesia Padilla to dismiss a lawsuit for unlawfully withholding millions of dollars from New Mexico immigrant taxpayers using federal Individual Tax Identification Numbers ("ITINs") to file their tax returns.
Two lawsuits were filed in February by MALDEF (Mexican American Legal Defense and Education Fund) with the law firm of Freedman, Boyd, Hollander Goldberg Urias & Ward, P.A. and Somos Un Pueblo Unido, as co-counsel in the case. One lawsuit was filed with named plaintiffs and another with plaintiffs filing under "Doe," in order to protect their identities.
The judge ruled that the plaintiffs must file the case using their initials, submit their I.D. numbers to the NMTRD that will be put under protective order, in order to safeguard their identities.
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 their taxes using an ITIN.
"We are pleased the judge allowed for this important case to move forward and to provide a means to protect these plaintiffs, in particular," said David Urias, a partner at Freedman, Boyd, Hollander Goldberg Urias & Ward, P.A. "Unfortunately, we are entering a time in this country where anti-immigrant vitriol has reached a fevered pitch."
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.
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 NMTRD instituted an arbitrary policy of denying tax refunds to immigrant residents who file returns using their ITINs.
Plaintiffs have sued the NMTRD 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.
"This is a great victory for the plaintiffs in this case and immigrants across New Mexico, who decided to take this brave stand and challenge the state's unlawful practice of not providing taxpayers with their tax refunds and not crediting them with the state tax they have already paid," said Gabriela Ibañez Guzmán, staff attorney at Somos' United Workers Center. "When we talk about taxpayers, we are also talking about their children, who also suffer the consequence of not receiving their tax refunds; school supplies, tutoring and medicine cannot be purchased."
MALDEF and its co-counsel seek to block these unlawful and discriminatory practices, and to recover the refunds owed by the NMTRD to the law-abiding individuals who earned the money through their hard work and overpaid their taxes.
Founded in 1968, MALDEF is the nation's leading Latino legal civil rights organization. Often described as the "law firm of the Latino community," 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: www.maldef.org.
Somos Un Pueblo Unido
Somos is celebrating 20 years of being New Mexico's statewide civil and worker's rights organization. In 2012, Somos founded New Mexico's first and only worker center, the United Worker Center of New Mexico, to organize and provide support to non-union, low-wage workers.
For more information on Somos, please visit: http://www.somosunpueblounido.org