State Must Stop Illegally Withholding Millions from Immigrant Taxpayers Who Use Individual Tax ID Numbers to File Returns While Lawsuits Move Forward

March 31, 2016

SANTA FE, NM - This week, MALDEF formally requested an injunction in state district court against the New Mexico Taxation and Revenue Department and Secretary Demesia Padilla (collectively, "TRD") to prevent them from continuing to unlawfully withhold millions of dollars from immigrant taxpayers who use federal Individual Tax Identification Numbers ("ITINs") to file their tax returns until two pending lawsuits, originally filed in February of 2015, are resolved. 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.

"Withholding monies owed to hardworking immigrants is the act of rogues and swindlers, not of legitimate government," stated Thomas A. Saenz, MALDEF President and General Counsel. "These monies should be circulating in the New Mexico economy, not held by a government agency acting outside its authority, while the court decides the issues in these important cases."

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.

"New Mexico's immigrant workers cannot afford to wait for a final court decision," stated Marisa Bono, MALDEF Regional Counsel and lead counsel in the two cases. "State officials should not be allowed to continue targeting immigrant families while our clients argue their full case before the Court."

The requested court injunction would temporarily halt an arbitrary policy enacted by TRD in 2012. Prior to the implementation of the 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.

"Despite losing her five-year effort to repeal driver's licenses, Governor Martinez continues to use her administration to single out and punish hard working immigrant families across New Mexico," said Marcela Diaz, Executive Director of Somos Un Pueblo Unido. "Discriminating against thousands of New Mexicans by withholding their hard-earned money is not what our state needs to better our economic standing and improve the lives of our families. This shameful practice must stop until our families get their day in court."

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 in both pending lawsuits 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 TRD to the law-abiding individuals who earned the money through their hard work and overpaid their taxes.

Copies of the complaints in this case are 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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