New Mexico friends, I need your help

[ILLMAS]

I am helping out a fellow accountant respond to a notice one of her clients received, here is the issue, her client received a notice from the state of NM stating that the TP failed to report a 1099 for $15K for 2012.  However when I take a look at the federal return the net profit ($12K) of the $15K is reported on the federal tax return and is reflected on the AGI which flows to NM.  The notice simply states you didn't report the $15K and here is your tax, both her and I feel this is a mistake, anyone that has experience in NM chime in?

Thanks

MAS

Edited August 19, 2015 by ILLMAS

[Catherine]

If you both feel certain it's a mistake, send in an explanatory letter with copies of the federal and state returns.  Highlight the place where the $15K is reported (and/or show where the net figure comes from).  Use lots of  highlighter, plus circles and arrows and whatever else.  

NM still does a lot of its processing by paper; it's possible some subsidiary form or schedule got lost or missed.
 

 

[Abby Normal]

Are you sure they're not looking for Gross Receipts Tax?

[ILLMAS]

Good point, I will reread the letter, maybe that is the cause.

 

thanks