Tucumcari Faces $6.5M in Unpaid Payroll Taxes

City officials uncover significant tax liability, consider spending cuts and state auditor oversight

Apr. 15, 2026 at 12:00am

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A fractured, abstract painting depicting a government building in Tucumcari, New Mexico, with overlapping geometric shapes and waves of earthy tones, conveying a sense of financial instability and urgency.Tucumcari's municipal finances are in disarray as the city grapples with over $6.5 million in unpaid federal payroll taxes.Tucumcari Today

The city of Tucumcari, New Mexico is facing over $6.5 million in unpaid federal payroll taxes spanning a three-year period from 2020 to 2023. City officials discovered the issue after a payroll clerk found a stack of unopened IRS letters informing the city of the tax delinquency. The city is now considering measures like employee furloughs, reduced health benefits, and changes to the municipal ambulance system to cut costs and address the tax liability.

Why it matters

The discovery of Tucumcari's significant unpaid tax bill has raised concerns about the city's financial management and accountability. It has prompted discussions about the need for greater oversight, with the possibility of the state auditor's office taking control of the city's audits and financial books. The situation highlights the challenges small municipalities can face in maintaining proper tax compliance and fiscal responsibility.

The details

According to city manager Renee Hayoz, the total tax liability is around $4.3 million, with an additional $2.1 million in penalties, resulting in a total of $6.5 million owed to the IRS. The issue was first uncovered when a payroll clerk found a stack of unopened IRS letters informing the city of the delinquency. The city's finance director at the time, Lisa Downey, had previously indicated that the city's payroll tax payments were showing as 'drafts' that appeared to have cleared, but no actual payment confirmation could be found.

  • The unpaid taxes span the period from the fourth quarter of 2020 to the fourth quarter of 2023.
  • The issue was first discovered in February 2026 when a payroll clerk found the stack of unopened IRS letters.

The players

Renee Hayoz

The current city manager of Tucumcari, who took office in January 2025 and has been working to uncover and address the city's financial issues.

Marcy Willis

The mayor of Tucumcari, who has stated that the IRS might waive the penalties on the unpaid taxes.

Lisa Downey

The former finance director of Tucumcari, who has now been hired as a contractor to help the state auditor's office and the city's auditing firm, TKM, complete the fiscal year 2023 audit.

Alyssa Sena

The payroll clerk who discovered the stack of unopened IRS letters informing the city of the tax delinquency.

TKM

The city's auditing firm, which has verified the underpayment of payroll taxes.

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What they’re saying

“This discovery further validates the concerns I shared with you recently. We continue to uncover significant issues on a daily basis — issues that stem from actions taken, or rather lack of, under the prior administration. Despite claims that our concerns were 'baseless' or 'red herrings,' the documentation now speaks for itself.”

— Renee Hayoz, City Manager

“I would recommend we tighten the belt even more. We need to buckle down. We need to cut from every department.”

— Jerry Lopez, City Commissioner

“I'm not a big fan of furloughs, but I know we have to do something.”

— Marcy Willis, Mayor

What’s next

The Office of the State Auditor will present its findings for fiscal year 2023 at the city commission's April 23 meeting, including a possible exit interview with commissioners that week. The state auditors are expected to perform the city's fiscal year 2024 audit and potentially the fiscal year 2025 audit as well, providing increased oversight of Tucumcari's finances.

The takeaway

Tucumcari's discovery of over $6.5 million in unpaid federal payroll taxes highlights the importance of strong financial management and accountability in small municipalities. The situation has prompted the city to consider drastic cost-cutting measures, including employee furloughs and changes to benefits, as well as the possibility of increased state oversight to help address the tax liability and restore trust in the city's finances.