Feds subpoena Tax and Rev audit records, newspaper reports

Federal investigators have subpoenaed records related to state audits of people who have been at odds with Gov. Susana Martinez’s administration or political operation, The Santa Fe New Mexican is reporting.

Gov. Susana Martinez

Heath Haussamen / NMPolitics.net

Gov. Susana Martinez’s spokesman says the suggestion that her administration retaliated against former staffers and political team members with tax audits is “a complete and utter joke.”

Some people who currently work for Martinez’s administration or political team pushed back, saying they’ve also been audited. And they pointed to a recent, dramatic increase in efforts to identify uncollected taxes.

Sunday’s article was the second time this weekend that The New Mexican reported on federal investigators asking questions about people close to Martinez. The FBI has been inquiring about the governor’s fundraising and her political consultant Jay McCleskey, according to an article published Friday.

The newest article quoted “a person familiar with the investigation” into the Taxation and Revenue Department (TRD) who said “a subpoena seeking information about at least some of the audits had been issued.”

The New Mexican, again citing the unnamed source, reported that the investigation is looking at “whether the agency performed retaliatory audits on former members” of Martinez’s political team or “state officials who ran afoul of her administration.”

The New Mexican quoted a handful of people who are at odds with Martinez and have been audited. Brent Eastwood, a former staffer in Martinez’s Economic Development Department, said he signed a waiver to let investigators obtain information from TRD about his gross receipts taxes, the newspaper reported. Eastwood has a pending whistleblower lawsuit against the administration.

And Andrea Goff, Martinez’s former campaign finance director, said she’s been “repeatedly audited” for the years 2009-2012. Goff has been in the news because in 2013 she talked with the FBI about Martinez’s campaign activities.

“As a dutiful taxpayer for almost 3 decades, this nonstop barrage by the state government has been a time-consuming, costly burden on me and my small business, and an enormous stress on my family,” The New Mexican quoted Goff as saying.

Chris Sanchez, current communications director for the Governor’s Office, rejected the suggestion that the audits are retaliatory.

“If the Martinez admin is targeting adversaries for tax audits – then explain how her comms director got selected? That’s me,” Sanchez tweeted Sunday.

Adam Feldman, a current political consultant for Martinez, tweeted in response, “I guess that makes me another Martinez adversary that got targeted for tax audit, too.”

The Albuquerque Journal reported on the sharp increase in audits in August. From that article:

“The number of desk audits – or letters to taxpayers alerting them of a possible discrepancy in taxes paid – launched by the agency has skyrocketed, from 666 during the 2011 fiscal year to 17,930 in the budget year that ended in June, according to data provided by the agency.”

That has led to an increase in identified money owed to the state – from $9.5 million during the 2011 fiscal year to $35.1 million last budget year, the Journal reported.

“This is a complete and utter joke,” Sanchez told NMPolitics.net about allegations of retaliation. “It’s not only provably false, but it shows how desperate political opponents of the governor are and the great lengths they will take to drag her name through the mud.”

The increase in audits, Sanchez said, came from “a computer-generated process, and the formula has identified thousands of people for audits – including me, the governor’s communications director, as well as other staff members in the administration and those who have worked on her campaign.”

Ben Cloutier, TRD spokesman, told NMPolitics.net the increased efforts to collect delinquent tax payments will continue to ramp up through next fiscal year. “Over the years and with automation, we have been better able to identify taxable income to New Mexico,” he said. “We do this by matching many variables, such as third-party information and information provided by the taxpayer.”

“When a discrepancy is detected that could indicate underpayment,” TRD sends a letter to the taxpayer, Cloutier said. The taxpayer has 60 days to provide information to explain the discrepancy. Taxpayers are also given the opportunity to self-initiate a “managed audit” if they want to check on whether they’ve failed to pay taxes they owed. That’s an opportunity to voluntarily come into compliance, Cloutier said.

“We anticipate this initiative will span 24 months and result in increased compliance and collections,” he said.

The explanation didn’t convince Deb Haaland, chairwoman of the Democratic Party of New Mexico, that there’s nothing nefarious about the audits coming from the administration of the governor, a Republican.

“I think I speak for a lot of New Mexicans when I say I’m worried about this crisis of leadership we have in New Mexico at the highest levels,” Haaland said in a news release.

This BBSNews article was syndicated from NMPolitics.net, and written by Heath Haussamen. Read the original article here.