do during a ten year period the circuit court granted summary judgment to the taxpayer holding that race all taxes due means all taxes do that were also assessed by the department  extent that it's persuasive and i'd argue that one sentence of an issue that was not considered oh it's not particularly persuasive for example so there are no case there are no cases on this particular issue that income taxes are due on the date on which the return for that tax years or so here any tax that is due during the ten year period of taxpayers that are eligible for amnesty any tax d during that period will be zero even if it says no yes because under the tax rules taxes always do that's all we do when the return is due even if it's later know they're they're good faith basis for this is the information they have at hand and they go ahead they file a return with the money do yes but as a matter of tax law in mt do it that time is not the amount that they say is you it's the amount that's properly reported on and and as an explanation of that point you'll see that they're only challenging double interest in this case they admit that they owe interest dating back all the way to when their returns were  taxation relies on a sup reporting system taxes are due and all instances before there is a you know in and ultimate determination about what the proper amount is but just as a matter of the tax statutes the tax that should say that all taxes real income was one hundred thousand dollars which would have required the payment of twenty thousand dollars in taxes how much tax was due on april the fifty's of twenty one whether the full amount that was that their twenty ten return was due right at twenty thousand dollars were due at that date not sixty thousand and if you were subsequently found you know in in two thousand and fourteen say it was ultimately determined that you did oh twenty thousand dollars you would have to pay the balance four thousand and you would know interest dating back to april fifteenth two thousand and eleven now the day which there was the final assessment from so we see an income tax context all taxes do means what it says all taxes do there's nothing in the n s t act that says it has to be a tax that's assessed by the department now this raises a practical question about what a taxpayer can do in a situation where where the taxes due but they don't know the precise amount because there could be a future change and that's why the department issued regulations to deal with this very situation if you look at the two thousand and three regulations there was a provision the practicality of the amnesty program how could we possibly know what taxes were due how could we possibly make a payment when there is going to be a change in the future there were other taxpayers that were able to climb this know i mean especially in the area of corporate taxation when you're dealing with complex tech tax issues they may be taking particular positions on which side has not made a ruling yet so it may be good faith but it may be ultimately wrong and the consequence of that could several hundred thousand dollars or millions of dollars so the fact that they may have been taking a position that was not that was in good faith in the sense that it was not read a list or you know somehow  contrary criminal or something like that that's one concept of good faith the concept of good faith in the two thousand and three amnesty program was you are either under i did or you possibly have or you have taxes that are due to the department that are not yet determined you can avoid interest on those outstanding tax liabilities by making an estimate and a reasoned judgment about how much you potentially oka the department if you underpay you get the benefits of amnesty for amount that are the amount that you paid and if you overpay you file a protective refund application or you execute a stay of the limitations period with the department and then you can be creditor refunded  good faith in the context of the two thousand and three m to see program has a more specific meaning it's give us an estimate of what you could possibly know it's i think it's analogous to how you might settle a jury case a case is about to go to jury the jury could decide that the victim's life was worth one million dollars the jury could decide that the damages are ten million dollars the jury could decide that the plaintiff that the defendant is not liable and award zero yet in order to settle the case you have to make a probabilistic estimate about what the value of the case is and what the probability of certain determinations by the judge and jury are same first those would be involved here in making a good faith estimate payment you don't know for sure but certainly specially an insurance company would have the expertise to make these kinds of probabilistic judgments about things that could happen in the future and again there were numerous tax payers as stated in the record that actually did make these good faith estimate payments and one example of those is the administrative face of a b c that you'll find in the that was a company while not its largest metropolitan life that company had one hundred million dollars in revenues so we're not talking about a simple tax issue here and they were able to make a good faith estimate payment it ended up being excessive and there are issues about the limitations period there but i think the case stands for the proposition that a taxpayer you know sophisticated taxpayer is able to make this kind of judgment and statement about all taxes do was obiter dicta it was unnecessary to the outcome of the case because the issue in schmidt was whether or not an amnesty payment you could simultaneously seek amnesty and also challenge your tax liability an administrative proceeding and schmidt said no you cannot your choice around his final you there apply for amnesty or you can test your tax liability in some other way but you can't have it both ways you can't get the benefits of amnesty and also try to get the benefits of challenging the liability and it mistreated so the definition of all taxes due in that single sentence and schmidt was not necessary to the resolution of the issue you don't have to define all taxes due to decide that the tax payer has one or the other choice they can either participate in amnesty or they can challenge the tax liability in an  ministrative review action also that sentence about all taxes do is not an integral part of the opinion the court gave several reasons why you could not simultaneously challenge challenge your tax liability  participating in amnesty most of a based on the structure of the act and also the department's regulations that all taxes do is only a small sliver of the analysis in the overall opinion and finally it's not as fully considered as it would have been had it been essential for example the port and schmidt did not even consider what the meaning of its holding would be in the income tax context where you know all taxes are due on the date that the return is due but you could have off and schmidt i believe was in june of one thousand nine hundred four so if you could only participate in the amnesty program if you had a final assessment most corporate income tax payers you know wouldn't participate for several years preceding the end of the amnesty period because of the time that it takes to go through the federal process and report it all changes that so again schmidt didn't really consider what its holding would mean for the eligible for amnesty if the circuit court's view of the two thousand and three amnesty act was correct this amendment is very difficult to explain number one ephedra changes were never eligible for amnesty why would you need ten would they only specify federal change liability if before if they had intended to adopt the prior view that any tax that was not assessed was not eligible rambis so the only possible explanation of the twenty ten amendments is that all taxes do were eligible for amnesty and the general assembly decided for its own policy reasons to limit the spoke but that of the two thousand and ten amnesty program by not including federal changelog council thank you good morning your honour's john before apple leave metropolitan life insurance company i think it's clear from the record that metlife was not the scofflaws let alone the criminal taxpayer in need of a pardon that's how the department framed the issue in this a in this case before you and consistent with long established illinois income tax procedure met life once it had a finalized federal change liability by that is once the i r s had finished up its audit and come to terms with metlife met life timely reported that federal change liability to the department under section five zero six the illinois income tax act and it paid the liability and under the illinois income tax act during the amnesty period and today for that matter your honour's tax payers are not allowed let alone permit required to estimate how much a federal change live below the might be down the road and pay that amount in the way the procedure works under section five zero six d and this is well established is that the taxpayer is to wait until there is a finalized federal change liability and then report that liability to the department on an amended return under section five of six of the new one is in terms  flavor to that corner because it is true that in this matter for that matter this case once met life had that finalized federal change tax liability post amnesty get it months post as it turned out and reported that liability to the department under section five of six b there was now a deficiency it was deemed assessed under section i know three day and then interest accrued back on at federal change tax liability to the due date of the returns from one thousand nine hundred eight in one thousand nine hundred nine and that's what met life paid it was that single interest and that single interest represented with twenty twenty hindsight you know post the period the time value of this additional income tax liability that met life turned out to have once the i r s audit ran its course and the federal change liability was determ with twenty twenty hindsight there was that liability and metlife paid that and that life doesn't dispute that it ot the single interest but i think it's also fair and reasonable to say that metlife didn't have a crystal ball during the amnesty period to predict or know what its federal change tax liability was going to be mr true it just said before you that corporate income tax returns are complicated matters that there are a lot of issues swimming around in them and even a sophisticated taxpayer doesn't know with clarity and with a crystal ball what the federal change tax liability adjustments are going to turn out to be during the period and that's what the department was asking that life to do so i think the question before the court this morning is whether as the department has asserted and claimed in its three fifths of the phrase all taxes due in the two thousand and three amnesty act encompasses whatever the illinois tax liability ends up being or turns out to be for a tax period covered by the two thousand and three amnesty act and whether that's the case as the department says even in situations where the department and the taxpayer didn't know what the federal change liability was going to turn out the big didn't know that during the mc period now we would submit the circuit court correctly hell in this case that the amnesty act was intended by the general assembly to provide a carrot and stick to require taxpayers the voluntary only pay their known tax liabilities known during the amnesty are your honor in the income tax procedure is you know a piece of paper that the i r s agent fills out teeing up an issue for further discussion the  represent a tax liability that has been sassed or determination that that that there actually is a liability this is an issue that the i r s agent is putting in the hopper for further discussion with the taxpayer down the road and so metlife had some of those an opus in front of there had been no discussion of any of the novas in fact i think the record is actually that that initial discussion of no buzz didn't even occur until the day before change tax liability hadn't even been issued have met life by the end of the embassy period so what i'm trying to strike here your honor is that this was a very fluid situation there was certainly an indication of some issues that the i r s agent had put in the hopper for further discussion but there hadn't been that discussion and nobody knew what that federal change liability was going to be  and that didn't happen until there were those discussions as it turned out in this matter in august of two thousand and four there was that finalization of the federal exchange liability and then met life as it was supposed to do under the income tax act reported that to the agent paid the liability and did everything that it was supposed to do under the illinois income tax act but i think that you know even sophisticated taxpayers don't know what the liability is going to turn out to be certainly met life you know had substantial it's perience with federal tax audit and knew that by don't means this every was that attacks here in met life situation in that apartment you were supposed to somehow make a good faith estimate they were supposed to have that first of all and if it then turned out that they had underpaid estimate that they had not you know guessed high enough that the department clearly says they would go in and tag that x pair with double interest and maybe double penalties on that shortfall so this was the way it was for rigged up in the regulations this was kind of a heads we win tails you lose situation of it's submit your honor under the department's regulations the department was firmly applying hindsight fairly claiming the benefit of hindsight and it was the tax care that was i think in the naive view of the department supposed to be able to make an accurate good faith estimate and you know pay that in  senator welsh one of the co sponsors explained that what the legislation was supposed to be doing was collecting past few taxes and that the idea here is that we can get these taxes do off the course senator lincoln other co sponsor said and what we're trying to do is collect a bill from taxpayers that it made us money and are willing to pay and senator welch a third person in the debates agreed that the two thousand and three amnesty tax liabilities during the amnesty act and the idea here was to get those tax payers that go in and make their payment to the department without further litigation and all of bad and get money into the state's hands they weren't based on some actual experience of my former firm so i don't want to name taxpayers or anything but i can think of a matter we had over there very large federal law ok that was provision that you read your honor in the regulation and went in and reported those known tax liabilities as a good faith estimate in order to get the abatement of the interest of penalties so it's possible that the department you know i think  way to read that statement in the regulation is that the department was giving the types of tax care that i just described an opportunity to you know make a good faith best about pretty no known federal change tax liability what it was going to be run in pay that money to the state and obtain the benefit of the abatement of the interest and penalties and i believe that statement in the regulation uses the  may it doesn't say shall and so the statement of the regulation does not say tax payers that are merely in the midst of an i r s audit during the n s t period shall make a good faith estimate and pay it in and if they don't is considering and passing the two thousand and three amnesty and using the same phrase all taxes do that they had used back in one thousand nine hundred four and it is the same phrase they did not have any precedent before them all  contemplating that the jet that the department would impose a good faith estimate payment procedure on taxpayers as it subsequently did when subsequent to the enactment of the two thousand and three act they brought out their the back part of the regulation where we are right now in a n l is all and by the way if there's a tax pair in the midst of an i r s audit they may decide to pay it and you're right you know certainly in the example i gave you of another this good faith estimate procedure was a creature of the department's regulation it's not in the statute it's not a part of the ninety four regulation and we would submit that this that the department really went what the statute contemplated and the general assembly contemplated in drafting this regulatory provision and so the provision is invalid for that reason the two thousand and ten act i think is some evidence because when that apart when the legislature sure you know did another amnesty act and use the same phrase all taxes do they made it explicitly clear that controls your decision this morning but i think it is some fairly strong evidence that the general assembly thought that the department head overreached in its two thousand and three amnesty act regulations the amnesty here edith to make an educated guess let alone a good faith estimate as to what its liability was going to be it could have guessed it could have paid something in but if it paid too little in it as is very likely the department admits that it would have been thoroughly reading it out that ronnie n and assessed double interest and maybe double penalties on that shortfall so you know this is not if the department is suggesting if net life is just something we wouldn't process issue that maybe wraps itself around all of this because what i'm describing here i think is a fairly arbitrary procedure in the regulation where the department of wanting taxpayers in a situation like met life to make a guess as to what their liability was going to be post amnesty period once the i r s audit was done paying it in and in order probably to really avoid double interest because that's fairly serious money very likely overpay you know as hot and then what the department was coupling with that was a very very short limitation period just one year on the ability of the taxpayer to claim back a refund once the amnesty once the i r s audit was actually completed and now the taxpayer under section five zero six be it something that could just have requested a wave was the problem well i think the real question is you know viewing this from the perspective a taxpayer like met life during the amnesty period why would they think that the department would have helped them out post either by giving them a waiver of that one year period the department would always have two years beyond the reporting date of the federal changes to issue an assessment so the department would never need a waiver from the taxpayer it was the taxpayer that would need a waiver from the department and i think reasonable sophisticated taxpayers would not have expected that the department would just accommodate them on a request like that when it meant the state giving money back to the taxpayer and the band hall affidavit that the department repeatedly cites i think it's interesting what it doesn't really say and descried you know it doesn't describe what were the circumstances  several dozen tax payers that supposedly made good faith estimate payments from the amnesty period that is how far along in the i r s audit were they and how noble were their federal change tax liabilities i've described you one situation where it was very affidavit doesn't describe how many of the good faith estimate this payments that were made to the department turned out to be true lol and those tax payers were hit with double interest and maybe double penalties by the department and they  my opponent cited to you so just in summary i'll make this one sentence because i think i've gone beyond my fifteen minutes on that sorry about that you know the department here i think is really applying it a wholly backward looking procedure in their i'd like to start with the issue of legislative intent that he discussed the one thousand nine hundred four act also does not define all taxes do so i had the only case that the only thing that allegedly would have defined all taxes do would have been the schmidt decision but as a explained this one sentence in a larger opinion there's no reason to think that twenty years later the general assembly would have seen that one sentence and shred and said oh these words must mean what the schmidt words said they mean as opposed to what they would generally mean which are the taxes that are due so i think that the that the fact that the two thousand and three amnesty act uses the same phrase all taxes do is not significant if you don't agree with the schmitz their argument that pertains to schmidt in other words if we knock out schmidt i don't think you get any additional pull from them from the words all taxes do being the same in both all statutes the second thing i say about legislative intent is that in two thousand and three we're facing a different fiscal situation and so and both of these in one thousand and four in two thousand and three the general assembly is saying to the department of revenue design an mc program that's going to be effective and bring in revenue in one nine hundred eighty four i believe that was the first amnesty program the department had done they get information from the process and they they know what works in an amnesty program and what doesn't so you would expect the next time around that the amnesty program is not going to be identical because the general assembly is relying on the department to draw on its expertise and it ministering prior amnesty programs and you're trying to draw a balance between bringing in revenue and not being you know and  concerns about fairness and other political considerations so i think you see changes each time in the amnesty acts because there's always going to be a balancing between those various considerations are we going to bring in enough revenue or is this going to be reasonable to the taxpayers those two it's aeration so you're going to see a different amnesty program each time because the statute authorizes the department to basically design all of the details of the programs you're not going to get a cookie cutter him a c program each time and that's what the general assembly  that's why the general assembly entrust the design decisions to the department instead of laying out in great detail on the statute all of the things that the department has to do to implement the program so in two thousand and three we have a severe financial crisis the general assembly changes the incentive structure in the two thousand and three amnesty act in one thousand nine hundred four it was simply a fifty percent abatement of interest this time around the general assembly says one hundred percent abatement of interest if you participate hundred percent additional penalty if you do not participate so in the department designing that program it's obvious from what the general assembly has done that they need to increase participation and one way of increasing participation is by a line tax payers who have taxes  but are not yet assessed or known to participate through this good faith so the good faith mechanism is consistent with the legislature's intent to increase participation in the program and bring in more revenue because as i explain hope any comments in the one thousand nine hundred four act because of how the program was designed there were a lot of income tax payers that would not have been able to participate which would then limit the amount of revenue that they missed the program would raise and so you get a different program in two thousand and three because the statute is different in some ways in the circumstances are different and also the department understands from past experiences what works and what doesn't last said like to touch on the due process concerns listening to his arguments i think you could say the same things about our one hundred percent interest in the basic text rupture that withholding provisions the fact that you have to pay tax before on your tax return before there's a final determination the fact if it subsequently changed your hundred percent interest if this theory about due process is correct as to two hundred percent interest it seems equally arbitrary to assess one hundred percent interest there's no explanation why one hundred percent interest and two hundred percent interest  different for the purposes of the process and as our brief explains this the standard for such an tippoo process is whether there's a reasonable relationship one of the goals of the him two thousand and three amnesty act indeed every amnesty act is to