## I L L I N O I S 

## O F F I C I A L 

## R E P O R T S Suprem e Court

Metropolitan Life Insuran ce Co. v . Ham er , 2013 IL 114234

Caption in S upreme Court: MET RO POL I TAN L I FE I NSURANCE COMPANY et al.
, Appellee s, v. BRI AN HAMER, Direc tor of the I llinois Depa rtment of Revenue
, et al.
, Appellants.

Docke t No. 114234

Filed J une 20, 2013

Held ( Note : Thi s sy ll abus

con st it ute s n o par t of the opi nio n of the cour t but has bee n pre

par ed by t h e Repo rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) Where statute provided that, during a six -we ek amnesty , “all taxes due” could be paid without inter est or penalty , but that double interest would

acc rue on liabiliti es unpaid during that time, taxpay ers then under fede ral audit for prior y ear s without knowing how their liabiliti es would chang e

wer e proper ly char g ed that double inte re s t wh ere , during the amnesty , they did not pay g ood-fa ith estimated taxes as provided by regulation, but paid t heir increase d liabiliti es onl y when t h o se became known afte r t he amnesty expired.

Dec ision Under
Review Appea l from the Appellate Court for the First District; hear d in that court

on appea l from the Circuit Court of Cook Co u n t y , t h e Hon. J ames C. Murra y , J r., Judge, pr esiding

.

J udg ment Appellate c ourt judg ment reve rsed. Circuit court judg ment reve rsed.Counsel on

Appea l L isa Madig an, Attorney Gene ral, of Springf ield (Michae l A. Scodro, Solicitor Gene ral, an d Eric Truett and Sunil S. Bha ve, Assistant Attorney s Gene ral, of Chica g o, of counse l), for a ppellants.

J ohn A. Biek, Andre a R

. Dudding and Christopher D. Mic kus, of Neal, Ger ber & Eisenber gL L P, of Chicag o, for a ppellees.

Marily n A. Wethekam and Fr ed O. Marc us, of Horwood Marc us & Be rk Chrtd., of Chicag o, for amicus curiae Council on St ate Ta x ation.

J ustices J USTI CE GARMAN delivere d the judgme nt of the court, with opinion.
J ustices Fr eema

n, Thomas, and Theis concur red in the judgme nt and opinion.
J ustice B urke dissente d, with opinion, joi ned by J ustice Ka

rmeier

. Chief J ustice Kilbride took no par t in the decision.

OP INION

¶ 1 I n 2003, the I llinois Gene ral Assembly enac ted the Tax Delinquenc y Amnesty Act (2003 Amnesty Act) (35 I L CS 745/10 (West 2004)), which established an amnesty prog ram for all taxpay ers owing any tax imposed by I llinois law. I t further provided that, upon pay ment by

a taxpay er of “all taxes due” for any taxable period betwee n J une 30, 1983, and J uly 1, 2002, the Depa rtment of Revenue (De partment) would abate and not seek to collect any interest or penalties and would not seek civil or criminal prosec ution of that taxpay er. T h e am n es ty period extended from October 1, 2003, throug h November 17, 2003. Those taxpay ers who failed to pa

y their unpaid tax liabiliti es within that period would be char g ed 200% interest. The Depa rtment promulg ated regulations implementing an amnesty prog ram, providing that

a taxpay er participating in the amnesty prog ram must pay its entire tax liability reg ardle ss of whether the liability was known to the Depa rtment or to the taxpay er. The regulations further provided that taxpay ers who wer e unsure of their tax liability wer e to make a go o d -f aith estimate of the liability

and pay it during the amnesty

period. ¶ 2 The I nterna l Revenue Service (I RS) audited the 1997, 1998, and 1999 fede ral income tax returns of plai n tiffs, Metropolitan L ife I nsuranc e Company and Unitary Subsidi arie s (collec tively
, MetL if

e )

. Following completion of the audit, MetL ife filed its amende d I llinois
tax re turns showing additional tax due. Be cause MetL ife paid the additional taxes a fter the amnesty period expired, the Depa rtment assessed 200% interest. MetL ife paid the taxes due under protest and filed an action disputing that it owed more than 100% interest and seeking an injunction to order de fenda nt State Trea surer to r efund the double interest cha rg ed. The circ uit court of Cook County g rante d M e tL if e ’ s mo tion for summary judgme nt. The appellate
court aff irmed, with one justice dissenting. 2012 I L App (1st) 1 1 0 4 0 0

. T h i s court g rante d

-2-defe ndants’ petition for lea ve to appe al. I ll. S. C t. R. 315 (eff. F eb. 26, 2010).

¶ 3 BA CKGROUND ¶ 4 MetL ife timely filed its I llinois corpor ate income tax returns for the y ear s 1998 and 1999 and paid the tax liability stated there in. On Dec ember 12, 2000, the I RS beg an a routine audit of MetL ife’s fede ral income tax returns. The audit was completed in J uly 2004, eig ht months afte r the expiration of the amnesty period. I n May 2002, the Depa rtment commence d an audit of MetL ife’s 1998 and 1999 I llinois income tax re turns. MetL ife provided the auditor with the chang es to its fede ral returns as a resul t of the fede ral audit (re fer red to as the fede ral chang e tax liability ). Ba sed up on MetL ife’s submissi ons, the Depa rtment deter

mined that MetL ife o we d additional I llinois income tax. On May 8, 2008, the Depa rtment assessed a 200% interest penalty ag ain s t M etL ife with respe ct to the additional tax deter mined to be due. MetL ife pa id the penalty under pr otest. ¶ 5 I n J uly 2008, MetL ife filed its complaint for an injunction and for decla ratory judgme nt under the State Offic ers and Employ ees Money Disposition Act (30 I L CS 230/1 et seq. (West 2010)). I t soug ht a decla

ration that the Depa

rtment was not entitled to assess double interest. MetL ife conce ded that it owed a 100% interest penalty

. I t soug ht a finding that application of the double interest penalty to its fede ral chang e tax liability violated its due proce ss rig hts under the United States and I llinois constitutions. I t further soug ht a preliminary injunction
to prohibit the Depa

rtment from transfe rring the double interest assessment money from the
p rotest fund to the g ener al reve nue fund until the court enter ed a final judgme nt. The trial
court g rante d the injunction. T h e De partment filed a motion to dismiss the action and to dissolve the preliminary

injunction. The trial cour t denied the motion. ¶ 6 MetL ife filed a motion for summary judgme nt. The motion contained stipulated fac ts as follows. MetL ife timely filed its I llinois corpor ate income tax returns for the tax y ear s 1998 and 1999, and paid the tax liabili t i es reported in the returns. I n Dec ember 2000, the I RS

commence d an audit of MetL ife’s 1997, 1998, and 1999 fede ral income tax re turns, which took more than 31⁄2 y ear s to complete. I n May 2002, the Depa rt m en t b ega n an audit of MetL ife’s 1998 and 1999 I llinois corpor ate income tax returns. On J une 20, 2003, the I llinois leg islature enac ted the 2003 Amnesty Act. The amnesty period beg an October 1, 2003, and concl uded on November 17, 2003. Under the 2003 Amnesty Act, a taxpay er who did not satisfy a tax liabili ty

that was e ligible f

or amne sty

by the conc lusion of the amnesty period

was subject to double interes t o n t hat unpaid tax liability

. The fede ral audit of MetL ife’s
returns was completed in J uly 2004. In o r after Aug ust 2004, MetL ife provided the final adjustments of the I RS to the Depa rtment’s auditor in lieu of filing amende d I llinois returns for the y ear s in question. I n Dec ember 2004, the auditor determ i n ed t h at MetL ife owed additional I llinois income taxes for 1998 and 1999 as a result of the cha n g es to its fede ral
returns. MetL ife paid the fede ral chang e tax liability during the course of the Depa rtment’s audit. MetL ife made its final pay ment in May 2007 at the conclusion of the au d i t

. The Depa rtment’s auditor informed MetL if e t hat it would rec eive a separ ate bill for double interest on the back taxes pursuant to the provisions of the 2003 Amnesty Act. I n J uly 2008, MetL ife pa id the double intere st under prote st and commenc ed this action.

-3-¶ 7 I n its motion for summary judgme nt, MetL ife argued that its fede ral chang e tax liability

was not elig ible for amnesty beca use the 2003 Amnesty Act did not require a taxpay er to pay

an unassessed, unag ree d-upon tax liability subject to an ong oing fede ral audit. MetL ife noted that the 2003 Amnesty Act applied t o “a ll taxes due” from a taxpay er and it argued that phrase should refe r to taxes assessed and due at the time of the a mnesty application. ¶ 8 The circ uit court g rante d MetL ife’s motion for summary judgme nt. The court conclude d that the phrase “all taxes due” in the 2003 Amnesty Act ref err ed to known tax liabiliti es. The 2003 Amnesty Act was intended by the l egi slature to provide a “ca rrot and stick” to

encour ag e tax p ay ers to voluntarily pay their known tax liability

. The court relied on dictionary definitions of “tax” and “due” in finding that “all taxes due” ref err ed to a prese nt obligation or a y et to be deter mined obligation. The court co n cluded that MetL ife’s obligation for taxes due for past y ear s was n o t d et er m i ned until Aug ust 2004, which was bey ond the amnesty

period. ¶ 9 The appellate court aff irmed, with one justice dissenting. 2012 I L App (1st) 110400. The majority ag ree d with the circ uit c ourt that “all taxes due” meant those taxes that a taxpay er knew wer e due and owing during the amnesty period. Thus, beca use MetL ife did not know it o wed additional taxes until afte r the amnesty period had ended, it could not have
p articipated in the amnesty prog ram. Id

. ¶ 16. The majority reje cted the Depa rt m en t ’s relianc e on section 601(a) of t h e I llinois I ncome Tax Act (I ncome Tax Act) (35 I L CS 5/601(a) (West 2010)), which provides that taxes for a taxable y ear become due when the tax return for that y ear is require d to be filed. Acc ording to the majority
, when MetL ife filed its 1998 and 1999 income tax returns and paid the amount of the tax shown due on the returns, it paid the amount that was due. MetL ife beca me liable for the additional taxes only afte r the expiration of the amnesty period. 2012 I L App (1st) 110400, ¶ 17. The majority simil arly reje cted the Depa

rtment’s relianc e on its regulations promulg ated in connect i o n with the 2003 Amnesty Act, finding that it was illogica l to require a taxpay er to pay a tax liability of which neither the taxpay er nor the Depa rtment was awa

re. The majority also found that the require ment in the regulations that taxpay ers in MetL ife’s position m ak e a go od-fa ith estimate of their additional tax liability exceede d the leg islative intent behind the 2003 Amnesty Act. Id . ¶¶ 23, 24. ¶ 10 J u s t ice Hoffma n dissented, concluding that the phrase “all taxes d u e” i n t h e 2 0 0 3 Amnesty Act means all taxes due on the date fix ed for filing the taxpay er’ s return, without assessment, n o t i ce , o r demand, and without reg ard to any extension of time for filing the
return. J ustice Hoffma

n found the statutory lang uag e to be clea r and unambig uous and that

a plain rea ding of section 601(a) of the I ncome Tax Act established that beca use MetL ife did
not pay all the taxes that wer e proper ly due when it filed its returns and it did not pay the additional amounts during the amnesty period, it was liable f

or double intere st. Id. ¶ 37.

¶ 11 ANAL YSI S ¶ 12 The 2003 Amnesty Act direc ted the Depa rtment to establish an amnesty prog ram for all taxpay ers owing any tax imposed by the laws of I llinois

. The amnesty peri o d ra n fr om October 1, 2003, throug h November 17, 2003. The 2003 Amne sty Act provide d:

-4-“The amnesty prog ram shall provide that, upon pay ment by a taxpay er of all taxes due from that taxpay er to the State of I llinois for any taxable period ending afte r J une 30, 1983 and prior to J uly 1, 2002, the Depa rtment shall abate and not seek to collect
any interest or penalties that may b e ap p l i cable and the Depa rtment shall not seek ci v i l or criminal prosec ution for any taxpay er for the period of time for whi ch amnesty has been g rante d to the taxpay er. Fa ilure to pay all taxes due to the State for

a taxable period shall invalidate any amnesty g rante d under this Act. Amnesty shall be g rante d only if all amnesty conditions are satisfied by the taxpay er.” 35 I L CS 745/10 (West 2004). ¶ 13 Pursuant to the l eg islature’s dire ctive, the De partment promulg ated r eg ulations (27 I ll. Reg

. 15161 (eme rg ency rule eff

. Sept. 11, 2003)) establishing an amnesty prog ram. I t provided that to participate in the amnesty p ro gra m , a taxpay er must pay the entire tax liability irrespe ctive of whether that liability was known to the Depa rtment or to the taxpay er. 27 I ll. Reg

. 15161, 15168. Taxpay ers, including tax pay ers under audit du ri n g t he amnesty period, who wer e unsure of the exact amount of their tax liability wer e to make a g ood-fa ith estimate of the a

mount of the liability . 27 I ll. Reg. 15161, 15168- 69. ¶ 14 I n connec tion with enac tment of the 2003 Amnesty Act, the leg islature amende d section 3-2 of the Uniform Penalty and Intere st Act to provide that if a tax pay er had a tax liability that was elig ible for amnesty under the 2003 Amnesty Act and failed t o s at isfy the tax liability duri n g t h e amnesty period, the interest charg ed to the t axpay er would be im posed
at a ra t e that was 200% of the rate that would otherwise be imposed. 35 I L CS 735/3-2(f) (West 2004). ¶ 15 The I ncome Tax Act provides that a taxpay er who is subject to a chang e in its tax l iability due to a chang e in its fede ral tax return must notify the Depa rtment of the chang e in the form of an amende d return not later than 120 day s after the fe dera l chang e has be come f inal. 35 I L CS 5/506(b) (West 2010). Section 903 of that Act provides that the amount of tax shown
t o be due on a tax return shall be deeme d assessed on the date of the filing of the return, including any amende d return showing an incre ase in the tax owed. Where an amende d
return is filed with the Depa rtment due to a chang e in a t ax p ay er’ s fede ral tax return, any defic iency in tax resulting there from shall be deeme d to be assessed on the date of filing the amende d return. 35 I L CS 5/ 903(a) (1), ( 3) (West 2010). ¶ 16 Wit h respe ct to taxpay ers under fede ral audit, the Depa rtment’s reg

ulation provided that:
“A taxpay er who is unde r fede ral audit may participate in the Amnesty Prog ram by following the proce dure set out in subsection (k) above and making a g ood faith estimate of the incre ased liability that may be owed to the Depa rtment. For purposes of participating in the Amnesty Prog ram only
, a taxpay er may file an amende d return repor ting a fede ral chang e p ri o r to rec eiving final notification from the I nterna l Revenue Service that the chang e has occur red. Although participa

nts in the Amnesty Prog ram may not see k o r claim ref unds, a limit ed exception to this rule will be permitted for taxpay ers whose ref und claims are based upon final deter minations of the I nterna l Revenue Ser

vice or the fe dera l courts.” 27 I ll. Reg. 15161, 15170. ¶ 17 Summary judgme nt is proper when “the pleading s, depositions, and admissions on file,

-5-toge ther with the aff idavits, if any , show that there is no g enuine issue as to any materia l fac t and that the moving party is entitled to a judgme nt as a matter of law.” 735 I L CS 5/2-1005(c) (West 2010). We revie w the circ uit court’s g rant of summary judgme nt de novo

. Lazenby v. Mark’ s Construction, Inc. , 236 I ll. 2d 83, 93 (2010). ¶ 18 This case require s us to interpre t the 2003 Amnesty Act. The primary purpose of statutory construction is to deter

mine and g ive eff

ect to the intent of the leg isl at u re

. B r u cker v. Merc ola
, 227 I ll. 2d 502, 513 (2007). The best indication of that intent is the lang uag e of the statute, which must be g iven its plain and ordinary meaning

. People v. Hammond
, 2011 I L 1 1 0044, ¶ 53. I t is improper for a court to depar t from the plain lang uag e of t h e s t at u t e b y

rea ding into it exceptions, limit ations, or conditions that conflict with the clea rly expressed leg islative intent. Illinois Graphics Co. v. Nickum
, 159 I ll. 2d 469
, 4 7 9 (1994). Statutory interpre tati o n i s a question of law that we revie w de novo

. Mattis v. State Universities Retireme nt System , 212 I ll. 2d 58, 76 (2004). ¶ 19 The question befor e us is the meaning of the phrase “all taxes due” in the 2003 Amnesty Act. The appellate court held that this phrase ref ers to those taxes that a taxpay er knew wer e due and owing during the amnesty period. The Depa rt m en t disag ree s and looks to the dictionary definitions of “due” and “owing .” The Depa rtment also cites section 601(a) of the I ncome Ta x Act, which provides, as indicated above, that a ta x pay er sha ll pay any tax due

o n o r b efor e the date for filing a return for the tax period, without assessment, noti ce , o r demand. Thus, a ccor ding to the D epar tment, a tax liabili ty

become s “due” on the date that the tax return must be filed. MetL ife’s income tax liabiliti es for 1998 and 1999 beca me due in 1999 and 2000, respectively . I ts unpaid tax liabiliti es we re e ligible f or amnesty beca

use at the time of the amnesty period, MetL ife had unpaid tax liabiliti es for tax periods cover ed by the 2003 Amnesty Act. The Depa rtment argues t hat t he appellate court err ed in findi ng that by paying the amount of taxes that it repor ted on its 1998 and 1999 income tax returns, MetL ife pa id all tax es due at that time. ¶ 20 The 2003 Amnesty Act does not define the phrase “all taxes d u e. ” W h er e a term is undefine d, we presume that the leg islature intended the term to have its popularly understood meaning

. P eo

p l e v. Ma ggette , 195 I ll. 2d 336, 349 (2001). I t is appropr iate to employ a dictionary to asce rtain the meaning of an o t h erwise undefine d word or phrase

. Landis v. Marc Realty, L.L.C

. , 2 3 5 I l l

. 2d 1, 8 (2009). Bla ck’s L aw Dictionary define s “due” as “[i] mmediately enfor cea

ble” and “[o] wing or pay able; constituting a debt.” Bla ck ’s L aw Dictionary 574 (9th ed. 2009). Taxes g ener ally become due upon the deadline for filing a tax return. MetL ife does not arg ue otherwise. I n this sense, I llinois ’ taxi ng scheme is consistent with the fede ral scheme

. Section 601(a) of the I ncome Tax Act provides that a taxpay er shall
pay income taxe s o n o r b efor e the date for filing a return for the tax period without

as s essm ent, notice, or demand. This provision is consistent with section 6151(a) of t h e fede ral I nterna l Revenue Code, which provides that when a tax return is require d to be filed, the t axp ay er s h all, without assessment or notice and demand, pay such t ax at t he ti me and place for filing the return, without reg ard to any extension of time for filing the return. 26 U.S.C. § 6151(a) (2006 ). See Baral v. United States
, 528 U.S. 431, 437 (2000) (sec tion 6151(a) of the I nterna l Revenue Code direc t l y contra dicts the conce pt that pay ment of income tax may be made only when the liability is known and fix ed by assessment). We also

-6-note section 203(e) (1) of the I ncome Tax Act, wh i ch p ro v ides in pertinent part that “a

taxpay er’ s g ross income, adjusted g ross income, or taxable income for the taxable y ear shall

mean the amount of g ross income, adjusted g ross i n co m e o r taxable income proper ly
repor table for fede ral income tax purpo ses for the t axable y ear under the provisions of t he I nterna l Revenue Code.” 35 I L CS 5/ 203(e) (1) ( West 2010). ¶ 21 MetL ife argues that section 601(a) does not g overn the meaning of the phrase “all taxes due” in the 2003 Amnesty Act, particula rly when fede ral chang es are involved. I t contends that, pursuant to section 506(b) of the I ncome Tax Act, it had an obliga tion to repor

t and pay the additi onal t ax to the Department onl y when the fede ral chang es were finalized and the additional tax was known. We reje ct MetL ife’s argument. Section 506(b) contains only a repor ting require ment. Tax p ay er s with a fede ral chang e must repor t the chang e to the Depa rtment within 120 day s of the finalization of that chang e. The lang uag e of that section does not preve nt taxpay ers with a fede ral chang e liability from participating in the amnesty prog ram. ¶ 22 I n arguing that the phrase “all taxes due” in the 2003 Amnesty Act means taxes assessed and due at the time the amnesty application is made, MetL ife relies on two appe llate cour t

case s interpre ting a previous amnesty law, th e 1 9 8 4 Tax Delinquenc y Amnesty Act (1984 Amnesty Act) (Pub. Act 83-1428 (ef f. Sep t

. 1 6
, 1 9 8 4 )). The lang uag e of that statute also contained the phrase “all taxes due” found in the 2003 statute. MetL if e ci t es S ch midt v. Departme nt of Rev enue , 163 I ll. App. 3d 269 (1987). There, t h e p l ai n t iff paid taxes under
pro te s t a n d s o ug ht administrative revie w. Whil e the case was pending
, the leg islature enac ted the 1984 Amnesty Act and the plaintiff applied for amnesty as t o the t axes in dispute. The Depa rtment g rante d the plaintiff’s application and subsequently filed a motion to dismiss the plaintiff’s complaint for administrative revie w, arguing that the plaintiff’s amnesty application amounted to an election of remedies. The circ uit court gra nted t he mot ion and the plaintiff appea led. The appellate court aff irmed. The court deter

mined that the plain meaning of the provisions of the 1984 Amnesty Act indicated that the purpose of the statute

was to cre ate finality with respe ct to the Depa rtment’s tax assessments. The court noted that the statute provided for pay ment of “all taxes du e” and that upon such pay ment, the Depa rtment would n o t s ee k further collection or enfor ceme nt action. The appellate court found that since the s t at ute ref err ed to the amount of tax due upon making the amnesty application and did not contemplate litigation by either the Depa rtment or the taxpay er, the lang uag e “all taxes due” m eant those taxes assessed and due at the time the amnesty application was made, rathe r than amounts t h at might ultimately be found to be due following judicial revie w. Id . at 273. ¶ 23 Figgie International, Inc. v . Departme nt of Reve nue , 167 I ll. App. 3d 196, 202 (1988), also cited by MetL ife, followed Schmidt

. These two case s do not help MetL ife’s cause

. Schmidt ’s interpre tation of the phrase “all taxes due” in the 1984 Amnesty Act was made in the context of deter

mining that the leg islature intended assessments of taxes made pursuant
t o an amnesty application to be final and not subject to judicial revie w. T h er e wa s n o question in Schmidt as to when the taxes wer e actua lly due and pay able. The same rea soning applies to Figgie
, which simply followed the rea soning in Schmidt

. MetL ife argues that the leg islatu re i s p resumed to have acte d with knowledg e of the holdings of these two case s

-7-when it enac ted the 2003 Amnesty Act. Howeve r, since neither Schmidt nor Figgie made a

judicial deter

mination as to when taxes were due, MetL ife’s a rg ument fails. ¶ 24 M et L i fe em p h as i z es that its fede ral chang e tax liability was unknown to it or t h e Depa rtment at any time during the amnesty period. I t argues t hat because, as of t h e en d of the amnesty period, MetL if e was disputing som e of the proposed fede ral chang es and was still rec eiving from the I RS notices of proposed adjustment afte r the amnesty period expired, i t co u l d n o t h ave made even an educated g uess as to its incre ased I llinois tax liability
, let alone a g ood-fa ith estimate. MetL ife arg ues that section 601(a) of the I ncome Tax Act does
not g overn pay

ments under a tax amnesty prog ram or p aym en t s of fede ral chang e tax liabiliti es. R at h er, acc ording to MetL ife, section 601(a) g overns only the filing of a taxpay er’ s initial return. MetL ife’s only support for this arg ument, howeve r, is its citation of the 1984 Amnesty Act and the two appellate cour t ca s es interpre ting it. As we have conclude d, MetL ife’s relianc e on the 1984 statute and on Schmidt and Figgie is misplaced. I n any event, the leg islature was awa re of section 601(a) when it draf ted the 2003 Amnesty Act and it did not provide for a differ ent time frame for the pay ment of taxes elig ib l e fo r amnesty

. ¶ 25 M et L ife also notes that subsequent to the enac tment of the 2003 Amnest y Ac t , t h e leg islature enac ted the 2010 Amnesty Act (35 I L C S 7 4 5/1 et seq. (West 2010)). I n

connec tion with that st atute, the leg islature ame nded the Unif orm Penalty and I ntere st Act
to provide that unpaid tax liabiliti es for tax periods betwee n J une 30, 2002, and J uly 1, 2009,
must be satisfied within the 2010 amnesty period to avoid double intere st, “except for any tax liability repor

ted pursuant to Section 506(b) of the I ncome Tax Act (35 I L CS 5/506(b)) that is not final.” 35 I L CS 735/3-2(g ) (West 2010). MetL ife argues that this amendment was

a clar ification of the leg islature’s intent in e nacting the 2003 Amnesty Act. I t a sserts that it

was unnece ssary to inc lude languag e in section 3-2 exempting nonf inal tax liabilities fr om the 2003 amnesty

prog ram be cause the Department’s regulations under the 1984 Amnesty Act did not sug g est that a nonfinal fede ral chang e tax liability would be included in the 2003 amnesty prog ram. MetL ife surmises that, with knowledg e of the Depa rtment’s re g ulations under the 2003 Amn es t y Act, the leg islature found it nece ssary to expressly car ve out an exception for those nonfinal tax liabiliti es. We note that, g ener ally
, a materia l chang e made by an amendatory act in the lang uag e of an unambig uous statute cre ates a presumption of a chang e in le g al rig hts, a lthough this pre sumption ca n be rebutted by evidenc e of a contra ry leg islative intent. People v. W oodard
, 175 I ll. 2d 435, 449 (199 7 ). The circ umstances surrounding the enac tment of an amendment must be consi d er ed

. I f t hey indicate that the leg islature intended to interpre t the orig inal act, the presumption of chang e will be rebutted. An amendme nt of an unambig uous statute indicates a purpose to cha

ng e the law , while no such purpose is indicated b y t he mere fac t of an amendment of an ambig uous provision. O’Connor v. A&

P Enterprises
, 81 I ll. 2d 260, 2 7 1 (1 9 8 0). MetL ife does not direc t our attention to any such circ umstances surrounding passag e of the 2010 Amnesty Act and the amendment of section 3-2 of the I ncome Tax Act, rely ing instead exclusively on Schmidt and Figgie and its claim that the leg islature acc epted those judicial interpre tations of “taxes due” in enac ting the 2003 Am n es t y Act. We have alre ady reje cted this argument. We likewise reje ct MetL ife’s argument that passag e of the 2010 Amnesty Act and the acc ompanying

-8-amendment to section 3-2 of the I ncome T ax Ac t wer e intended mere ly to clar ify the

leg islature’s intent in ena cting the 2003 Amnesty Act. ¶ 26 MetL i fe ar gu es t h at the appellate court was not require d to defe r to the Depa rtment’s “over rea ching regulations” afte r finding them to be illogica l and that the reg ul at i o ns exceede d the l eg islative intent of the 2003 Amne sty Act. MetL ife asserts that the pay ment of a g ood-fa ith estimate of tax li ability to participate in the amnesty prog ram was require d only by the Depa

rtment’s regulations. W e have eff ectively reje cted this argument above in finding that the phrase “all taxes due ” in the 2003 Amnesty Act ref ers to those taxes due at the t ime the i nitial retu rn i s re quired to be filed. I n addition, as not ed by the Department’s counsel at oral ar gu m en t , i t is not useful to compar e the 1984 Amnesty Act to the 2003 Amnesty Act beca

use in 1984, there was no need to make a g ood-fa ith estimate of taxes due since there was no require ment that taxpay ers participate in the amnesty prog ram and there

was no penalty for not participating. I n 2003, the leg islature imposed a 200% interest penalty

on those taxpay ers wh o d i d n o t p articipate; thus, it was nece ssary to provide a way for taxpay ers whose tax liability was uncer tain to participa

te in the prog ram. The Depa rtment’s
g ood-fa ith estimate regulati on made that participation possible. We there fore reje ct MetL ife’s argument that the Depa rtment’s reg

ulations overr eac hed and contra dicted the leg islative intent of the Amnesty Act. ¶ 27 Whil e this case was in the briefin g s t age , t his court allowed the Depa rtment to cite an appellate case whose decision is contrar y to that of the appellate decision here

. I n Marriott International Inc. v. Hamer
, 2012 I L App (1st) 111406, the I RS beg an an audit in 2004 of Marr iott’s fede ral tax returns for the y ear s 2000 throug h 2002. That audit resu l ted in additional fede ral income tax liability for those y ear s. Following a stat e au d i t, the Depa rtment deter

mined that Marr iott owed additional state tax. Be cause the 2003 Amnesty Act applie d t o M ar ri o tt’s tax returns and Marr iott did not pay all of i ts I llinois income tax liability during t h e amnesty period, the Depa rtment assessed 200% interest on Marr iott’s unpaid tax liability

. Marr iott paid the taxes and interest under protest. The trial court g rante d
summary judgme nt to Mar ri ott on the basis that beca use Marr iott had paid all the taxes it
repor ted on i ts tax returns and beca use i t did not know of it s additional tax liability during the amnesty period, double interest did not apply

. The appellate court reve rsed, finding that the phra se “a ll tax es due” in the 2003 Amnesty Act mea nt all tax es prope rly

repor table for fede ral income tax purposes for the taxable y ear , pursuant to section 203(e) (1) of the I ncome T ax Act. Id. ¶ 26. The court also reje cted Marr iott’s relianc e on Schmidt and agr ee d wi t h J ustice Hoff

man’s dissent in the instant case

. Id. ¶¶ 36, 41. ¶ 28 We ag ree with the appellate court in Marriot t an d wi t h J ustice Hoffma n in the instant

case and hold that the plain and ordinary meaning of the phrase “all taxes due” in the 2003 Amnesty Act ref

ers to taxes that are due based upon proper ly repor table income at the time the taxpay er’ s tax return is require d to be filed. There fore
, when MetL ife failed to pay those
taxes during the amnesty period, it beca me l i ab l e for the 200% interest the Depa rtment imposed. ¶ 29 Met L i fe al s o ar gu es that imposit ion of the 200% interest under the fac ts of this case violated its rig ht to substantive due proce ss. MetL ife raised this issue in the appellate court but the court did not rea ch the i s s u e in light of its decision holding that MetL ife was

-9-improperly assessed 200% interest. ¶ 30 The power of the state to impose fines and penalties for a v i o l at i o n o f its statutory require ments is coeva l with g overnme nt. In re Mar r i a g e of Miller
, 227 I ll. 2d 185, 196 (2007). Howeve r, the leg islature’s authority to set such fines and penalties is limit ed by the require ments of due proce ss. St. Louis, Iron Mountain & Southern Ry. Co. v. W illiams
, 251 U.S. 63, 66 (1919). Where, as here
, the statute at issue does not implic at e a fundame ntal constitutional rig ht, court s em ploy the rational basis test to deter mine whether the statute satisfies due proce ss. Under this test, the statute need only bear a rea sonable relationship to

a leg itimate state interest. Miller
, 227 I ll. 2d at 197. A statutory penalty will not run afoul of due proce s s u n less it is so sever e and oppressive as to be wholly disproportionate to the offe nse and obviously

unrea sonable. Id . at 198. ¶ 31 MetL ife does not a rgue that the state lacke d a leg itimate inter est that was serve d by the double interest penalty or that the 200% interest provision lacks a rea sonable rela tionship to

a leg itimate state interest. Rather, it a rg ues that the provision should not have been applied
to it beca use it did not know during the amnesty period what its fe dera l chang e tax liability

was g oing to be. MetL ife contends that the Depa rtment’s “g ood-fa ith estimate” regulations compounded the problem by attempting to coer ce M et L ife into overpa y ing its additional I llinois income tax liability to avoid being subjected to the double interest. Acc ording to MetL ife, any g ood-fa ith estimate would have amounted to nothing more than a g uess, g iven the numerous issues ra ised by the I RS i n the fe dera l audit. ¶ 32 The Depa

rtment responds that char g ing MetL ife 200% interest on taxes not paid during the amnesty period is rationally related t o the s tate’s legitimate interest in raising reve nue. Acc ording to the Depa

rtment, the leg islature ena ct ed t he 2003 Amnesty Act at a time of fi nancia l crisis and the double interest provision serve d as an appropr iate “st i ck ” t o

encour ag e taxpay ers to pay any unpaid tax liability during the amnesty period. Fur ther, notes the Depa rtment, it provided by regulation for ref unds for taxpay ers who overe stimated their tax l iability

and thus overpa id their taxes during the amnesty period. ¶ 33 We ag ree with the Depa rtment. We find that the 2003 Amnesty Act b o re a re asonable relationship to the state’s leg itimate interest in raising reve nu e. T h e leg islature g ave taxpay ers in MetL ife’s position an op p o rtunity to avoid the statutory 200% interest by making a g ood-fa ith estimate of their tax liability and paying that liability during the amnesty period. Fu rt h er, we rejec t MetL ife’s arg ument that even had i t made a g ood-fa ith estimate and paid t h o s e t ax es during the amnesty period, there is no g uara ntee that it could have obtained a ref

und of any overpa

y ment, g iven the one-y ear limit ation on apply ing for ref unds. MetL ife’s argument is hy

pothetical and speculative beca use it chose not to make a g ood-fa ith estimate of its incre ase d t ax l i ab i lity and did not pay any of the tax defic iency during the amnesty period. Those taxpay ers who paid their tax liability during the amnesty period wer e

rew arde d with a 100% abate ment of interest and penalties and wer e protec ted from any civil

or criminal liability

. Those who chose not to make a g ood-fa ith estimate of their tax liability during the amnesty

period we re pe nalized f

or fa iling to do so. Althoug h 200% intere st is a

co n s i dera ble penalty
, we do not find it to be so arbitra ry and unrea sonable as to violate substantive due proc ess.

-10-¶ 34 CONCL USI ON

¶ 35 We hold that the phrase “all taxes due” in the 2003 Amnesty Act means taxes that wer e proper ly repor

table at the time the initial tax return was require d to be filed, rathe r than taxes known to be due during the amnesty period. We furth er h o l d that the imposit ion of 200% interest pursuant to section 3-2(f ) of the Uniform Penalty and Intere st Ac t u p on taxpay ers who fa iled to pay

a tax liabili ty

elig ible for a

mnesty under the 2003 Amnesty Act does not violate substantive due pr ocess.

¶ 36 Appellate c ourt judg ment reve rsed. ¶ 37 Circuit court judg ment reve rsed.

¶ 38 J USTI CE BURKE, dissenting : ¶ 39 The 2003 Tax Delinquenc y Amnesty Act (Amnesty Act) established a n a mn e s ty prog ram which allowed a delinquent taxpay er to pay “all taxes due” for any taxable period afte r J une 30, 1983, and prior to J uly 1, 2002, during a six -we ek repor ting period from October 1, 2003, throug h November 15, 2003. 35 I L CS 745/10 (West 2004). For taxpay ers participating in the
prog ram, t h e I l l i n o is Depa rtment of Revenue (De partment) would abate and not seek to collect any applicable interest or penalties, nor would the Depa rtment seek civil or criminal
prosec ution. Id. At the same time the leg islature extended this car rot, it also extended a stick, amending section 3-2 of the Uniform Penalty and I ntere st Act to provide that a taxpay er who had “a tax liability that is elig ible for amnesty” under the Amnesty Act but who failed to pay that liability

during the amnesty

period wa s subject to a pena lty of 200% inter est. 35 I L CS 735/3-2(f) (West 2004). ¶ 40 MetL ife, the taxpay er in this appea l, was hit with the stick and assessed a 200% intere st penalty for its failure to participate in the 2003 amnesty prog ram. This assessment was made by the Depa

rtment even though MetL ife was underg oing both a state and fede ral audit during the amnesty period and even though MetL ife owed no taxes to the state at that time. Fur ther,

even if MetL ife had wished to apply for amnesty in order to rea p the corr esponding benef its of no interest or penalties, it could not have done so. At the time of the amnesty prog ram, neither the Depa

rtment nor MetL ife knew whether MetL ife owed any additional taxes to the State of I llinois , let alone the a mount of such tax li abilities. ¶ 41 Both the lower courts rec og nized that MetL ife wa s wrong fully penalized for its fa ilure to pa y “all taxes due ” during the amnesty period, when no deter mination ha d been made at that time that MetL ife owed taxes to the state and no dete rm i n ati on had been made that it

was a delinquent taxpay er. 2012 I L App (1st) 110400. The majority
, howeve r, now reve rses the lower courts, holding that MetL ife was subject to the double interest penalty beca use it failed to prepa

y the corr ect amount of taxes “due” to the state during the time period cover ed by the Amnesty Act. Supra ¶ 35. I n my view, the res u l t re ac hed by the majority g oes far bey ond what the leg islature intended when it enac ted the Amnesty Act an d o ff ends basic principles of log ic and c ommon sense. I there fore dissent.

-11-¶ 42 I . Ba ckg round

¶ 43 MetL ife timely filed its I llinois corpor ate income tax returns for tax y ear s 1998 and 1999 and paid the tax liabiliti es repor ted on those returns. On De ce m b er 1 2
, 2000, the United States I nterna l Revenue Se rv ice (I RS) beg an a routine audit of the consolidated fede ral income tax returns that MetL ife and its non-unitary subsidiaries had filed for tax y ear s 1997, 1998, and 1999. The fede ral audit was completed in J uly 2004, more than 31⁄2 y ear s afte r it

commence d. I n May 2002, the I llinois Depa rtment of Revenue beg an an audit of MetL ife’s
state corpor ate income tax returns for tax y ear s 1998 and 1999. The state audit was not conclude d until May

2007, approximately five y ear s afte r i ts commence ment. Thus, at t he time of the 2003 amnesty period, from October 1, 2003, throug h November 15, 2003, neither MetL ife nor the Depa

rtment knew whether MetL ife owed any additional state income taxes for tax y ear s 1998 and 1999. ¶ 44 I n Aug ust 2004, approximately nine months after the expiration of the amnesty period, MetL ife provided its finalized fede ral audit adjustments to the D e p a r tm e n t’ s auditor pursuant
t o section 506(b) of the I llinois I ncome Tax Act (35 I L CS 5/506(b) (West 20 1 0 ))

. T h e auditor incorpora

ted these fede ral chang es into the state income tax audit a n d d eter mined that MetL ife owed additional income taxes for 1998 and 1999 as a result of the fede ral chang es (the “fe dera l chang e tax liability ”). Over the course of the ong oing state audit, MetL ife made three separ ate pay

ments to the Depa

rt ment for its additional income tax liability

. MetL ife made its first pay

ment of $678,191 on Fe bruar y 24, 2005, afte r rec eivi ng and executing a doc u me n t e n ti tl e d “ Wa ive r of Restriction on Assessment and Collection of Def iciency in Tax and Acc eptanc e of Over

pay ment” (F orm I L -870). The state auditor later discovere d an err or in the computation o f M et L i fe ’s fede ral chang e tax liability
, afte r which MetL ife paid an additional $270,085 on J an u ar y 11, 2006. MetL ife made its final pay ment of $705,879 in May 2007 at the conc lusion of the state audit. ¶ 45 On M ay 8
, 2 0 08, the Depa rtment assessed double interest totaling $2,207,456 ag ainst MetL ife with respe ct to its fede ral chang e tax liability beca use MetL ife failed to participa te in the amnesty prog ram. MetL ife paid the penalty under protest and filed the instant verifie d complaint for injunction and decla ratory judgme nt. Whil e MetL ife conce ded that it owed single interest on its unpaid t ax liabiliti es for 1998 and 1 9 9 9
, it objected to the i mpositi on of the double interest penalty

. MetL ife contende d that it should not have been penalized for its fa ilure to pa

rticipate in the amnesty prog ram wher e it had no prese nt liability for unpaid state income ta x es at that time. ¶ 46 Both the trial and appellate courts held that MetL ife did not have a tax liability elig ible for a mnesty and could not have participated i n the amnesty prog ram when it did not know during the amnesty

period whe ther it owed a ny additional income taxes.

¶ 47 I I . Analy sis ¶ 48 For the Depa

rtment to imp o s e the penalty of 200% interest under 3-2 of the Uniform Penalty and I ntere st Act (35 I L CS 735/3-2(f) (West 2004)), the tax p ay er must have had a “tax liability that is elig ible for amnesty under the [Amnesty Act],” an d t h e tax pay er must

-12-have f ailed “to satisfy

the tax liability during the amnesty period provide d for in that Ac t.” I n turn, for there to be a “tax liability ” elig ible for amnesty under section 10 of the Act, there had to be “taxes due” from the taxpay er during the taxable period ending afte r J une 30, 1983, and prior to July 1, 2002. Thus, this c ase turns on the meaning of the phrase “taxes due” in section 10 of the A mnesty Act. ¶ 49 The majority holds that “the plain and ordinary meaning of the phrase ‘all taxes due’ in the 2003 Amnesty Act ref ers to taxes that are due based upon proper ly repor table income at the time the taxpay er’ s tax return is require d to be filed.” Supra ¶ 28. The sole leg al authority cited by the majority

for this conc lusion is s ection 601(a ) of the I ncome Ta x Act (35 I L CS 5/601(a) (West 2004)). Supra ¶ 20. Section 601(a) states that taxes repor ted on a tax return

are “due there on” at the time a taxpay er files the return. Thus, the majority holds that, even though MetL ife did not actua lly know whether it owed additional taxes during the amnesty period, those taxes wer e never theless “due” at the time MetL ife filed its returns in 1998 and 1999 and, ther efor e, MetL ife ha d a “ta x liability ” subjec t to the Act. I disag ree

. ¶ 50 I t is alway s a risky un d er t aking t o lift a st atutory term from one contex t and place into another (see
, e.g. , People v. Vincent
, 226 I ll. 2d 1 (2007))
, and the majority has err ed in doing

so here

. We cannot rely on the definition of “due” in section 601(a) beca use the intent of the Amnesty Act is to punish taxpay ers who had a known delinquency at the time of the amnesty period. I ncorpor ating the meaning of “due” from section 601(a) into the Act has the perve rse eff ect of punishing a t ax p ay er for failing to pay an unknown and as y et undeter mined liability . This is absurd on its face and ca nnot be cor

rec t. ¶ 51 That the leg islature intended to punish taxpay ers who wer e in delinquency at the time of the amnesty

period is obvious from the plain languag e of the Amnesty Act. The title of the Act is the Tax Delinquenc y Amnesty Act. 35 I L CS 745/10 (West 2004). The term “delinquenc y ” is define d as “1. A failure or omission; a violation of a law or duty

. *** 2. A debt t h at i s overdue in pay ment.” Bla ck’s L aw Dictionary 493 (9th ed. 2009). I t is thus evident that the leg islature i n t ended to punish delinquent taxpay ers who wer e not in compli an ce wi t h the I llinois tax laws at the time of the amnesty prog ram. L eg islative
statements further undersc ore this point. See, e.g. , 93d I ll. Gen. Assem., House Procee dings, May 29, 2003, at 158 (statements of Represe ntative Bla ck) (“I would simply submit that the
cost of g oing afte r s o m e o f the scoff laws can exceed the amount of money that we sometimes are able to collec t. *** Ithink it’s a rea sonable attempt in a very difficult fisca l period to try and convince some people to get ca u ght up in their tax pay ments.”); 93d I ll. Gen. Assem., Senate Procee dings, May 31, 2003, at 41 (statements of Senator Welch) (“This is for past-due taxes ***, and the idea he re is that we can g et these taxes due off the books ***.”); 93d I ll. Gen. Assem., Senate Procee dings, May 31, 2003, at 43 (statements of Senator L i n k ) (“ W h at we’ re try

ing to do is collect a bill—an undue tax burden to our State fr o m people that owe us money and that are willing to pay ***.”); 93d I ll

. Ge n

. Assem., S enate Procee dings, May 31, 2003, at 47 (statements of Senator Welch) ( “What we’ re doing here is saying an amnesty means they admit that they owe a cer tain amount of mon ey

. I f t h ey didn’t admit they

owed it, they

wouldn’t pay

that amount.”). ¶ 52 I n addition, later amendments to the Amnesty Act and the Uniform Penalty and I ntere st Act reve al that the leg islature never intended for amnesty t o apply to taxpay ers who wer e

-13-under audit and wer e unawa re o f t h e ex i s t ence or amount of additional taxes owed to the State. I n 2010, the Gene ral Assembly amende d the Act to establish another amnesty period which wa s near ly identical to the 2003 amnesty prog ram, with one notable exception. See 35 I L CS 745/10 (W es t 2010). The double interest penalty was imposed on taxpay ers who failed to satisfy a tax liability which was elig ible for the 2010 amnesty prog ram, “except for
any tax liability repor

ted pursuant to Section 506(b) of the I llinois I ncome Tax Act (35 I L CS 5/506(b)) that is not final.” 35 I L CS 735/3-2(g ) (West 2010). I n other words, taxpay ers with nonfinal tax liabiliti es wer e specific ally excluded from participation in the 201 0 amnesty prog ram and thus w e r e exempt from the double interest penalty

. The 2010 amendments make it absolutely clea

r that the leg islature never intended to penalize taxpay ers who had uncer tain future ta x liabiliti es for

their fa ilure to pay

taxes during the a

mnesty period. ¶ 53 I n light of the fore g oing, the phrase “taxes due” under section 10 of the Amnesty Act, in
my view, m u s t m ea n a k nown delinquency at the time of the amnesty period. Under this standard, the rele vant questi on is whether MetL ife was a delinquent taxp ay er wh i ch had a known tax debt owing to the Depa rtment at the time of the amnesty period. To illust rate why MetL ife was not a delinquent taxpay er, it is helpful to examine the state laws perta ining to income tax filing. I ncome tax collection in I llinois is based on self- assessment. 1 ¶ 54 Un d er section 601(a) of the I llinois I ncome Tax Act, a taxpay er files a return, wh i ch discloses what the taxpay er owes the state in income tax. 35 I L CS 5/601(a) (West 2004). The
amount of tax shown on the tax return is “due t h er eon” to the Depa rtment, and no assessment, notice, or demand by the Depa rtment is require d. Id. The amount of tax shown on the re turn is deemed to be assessed on the date of filing of the re turn. 35 I L CS 5/903(a) (West 2004). As soon as pra cticable afte r the re turn is f iled, the Depa

rtment shall examine the return to deter

mine whether it states the corr ect amount of tax. 35 I L CS 5/904(a) (West 2004). I f the Depa

rtment finds that t h e t ax am o u n t shown on the return is less than the

corr ect amount of tax, the Depa rtment “shall issue a n o t i ce o f defic iency to the taxpay er which shall set forth the amount of tax and penalties proposed to be assessed.” Id. The notice of defic iency constitutes an assessment of the tax and penalties specifie d in the notice afte r 60 day s have pa ssed without the taxpay er f iling a pr otest. 35 I L CS 5/ 904(d) ( West 2004). ¶ 55 Reg ardle ss of whether a notice of d ef i cienc y has been issued, a tax pay er is require d to
repor t to the Depa

rtment any chang e to its fede ral taxable income. 35 I L CS 5/506(b) (West 2004). Such repor

t may be in the form of an am en d ed I llinois tax return or other form of notification and must be filed within 120 day s of an ag ree ment or final deter mination by the I RS. Id. Amended I llinois returns used to re p o rt such a fede ral chang e are require d to be

s i gn ed u n d er penalties of perjury

. 35 I L CS 5/504 (West 2004). Where a taxpay er files a repor t or amende d return pursuant to section 506(b), any defic iency in I llinois tax resulting from the chang e to fede ral taxable income “shall be deeme d to be assessed on the date of

Fede ra l inc om e t a x e s a re al so sel f- ass ess ed. See 26 U.S.C. § 6151 (a ) (20 06) ; Bara l v. 1
Unit ed Sta te s , 528 U.S. 431, 437 (20 00) (i nco m e ta xes m ay be “pa id” pri or to for m al ass ess m ent of the ta xes ); see al so Flo ra v. Unit ed Sta te s , 362 U.S. 1 4 5
, 1 7 6 (19 60) (“ Our syste m of ta xat ion is bas ed u pon volunt ar y asse ssment and paym ent , not upo n di st ra int .”)

.

-14-filing such repor t or amende d r e tu

r n and such assessment shall be timely notwithstanding any other provisions of this Ac t.” 35 I L CS 5/903(a) (3) (West 2004)

. The Depa rtment may then issue a notice of defic iency for additional I llinois income taxes due within two y ear s afte r the date of the taxpay er’ s repor

t or amende d return. 35 I L CS 5/ 905(e) (2) ( West 2004). ¶ 56 I mportantly
, the Depa rtmen t ’s d et er m i n at ion of additional I llinois income taxes due b as ed on fede ral chang es to taxable income does not mean that a taxpay er violated t h e I ncome Tax Act when filing its orig inal return. A taxpay er’ s orig inal return is proper ly
prepa red and filed wher e it repor ts to I llinois
, under penalties of perjury
, the fede ral taxable income and other amounts disclosed to the I RS on the taxpay er’ s fede ral return. See
g ener ally 35 I L CS 5/203(b), 403(b) (West 2004)

. In the event that a taxpay er is r equire d to amend its origi n al return and pay additional income taxes based on fede ral chang es, the taxpay er is not treated as delinquent by the I ncome Tax Act. Although the taxpay er may be require d to pay interest acc rui n g t o the date of its orig inal return (35 I L CS 735/3-2 (West 2004)), no additional pen al t y i s assessed for underrepor ting tax es on the original return or failing to pay the additional taxes when the orig inal return was filed (see g ener ally 35 I L CS 735/3-3(b) to (b-20)
, (c) (West 2004) (setting forth penalties for underr eporting and underpa y ing ta x es))

. ¶ 57 I n the case at bar, MetL ife timely filed its I llinois income tax returns for 1998 and 1999 and paid the taxes shown on the re turns at the time a nd place require d by section 601(a) of the I ncome Tax Act. Du ri ng the s ix -we ek 2003 amnesty period, MetL ife was underg oing 2

a fe d eral and state audit of its income taxes. As of the end of the amnesty period, the Depa rtment had not issued a notice of defic iency indicating that MetL ife o we d ad d itional I llinois income tax es, nor had the I RS made a final determination of chang es t o MetL ife’s fede ral taxable income. I n J uly 2004, approximately eig ht months after the expiration of the amnesty period, MetL ife was notified that its fede ral tax able income had bee n adjusted by th e I RS due to the fede ral audit. MetL ife subsequently repor ted to the Depa

rtment the finalized fede ral chang es with in 120 day s afte r the I RS deter mination, pursuant to section 506(b) of the I ncome Tax Act. The tax liabi l i t i es b ased on the fede ral chang es wer e not deeme d to be assessed until MetL ife repor ted those chang es to the Depa rtment. See 35 I L CS 5/903(a)( 3) (W est 2004). MetL ife later paid it s additional income tax es i n acc ord wit h the results of t he audit and paid interest accr uing to the due date of its orig inal returns. See 35 I L CS 735/3-2(c) (West 2004). MetL ife did not protest t h e assessment of single interest beca use such intere s t wa s not a penalty for its failure to pay taxes. Rather, the interest
compensated the state for the amount of MetL ife’s additional income taxes that, with ear lier resolution of uncer

tain tax issues, it would have paid to the state on the d u e date of its orig inal tax returns for 1998 a nd 1999. ¶ 58 MetL ife thus was in full compliance with the I llinois tax laws with reg ard to the manner

I not e tha t the Depa rt m ent has not al le ged tha t Me tL i f e int ent ion al ly unde rr epo rt ed it s 2

ta xab le inc om e on it s 1998 and 1999 ta x re tur ns. Unde r p e n a l t y of per j ury (35 I LCS 5/5 04 (W est 2004 ))
, Me tLi fe re por te d what it bel ie ved to be the pro per ly payabl e amount of inc om e ta x li abi li ty at th e t ime it fi le d i ts re tur ns.

-15-in which it repor ted and paid its taxes due to the State of I llinois

. MetL ife met all applicable d ea d l ines set by the I llinois I ncome Tax Act and followed the statutory proce du re s fo r repor ting and paying fede ral chang e tax liabiliti es, including interest, to the Depa rtment. Acc ording ly
, since MetL ife was under no leg al obligation at the time of the amnesty period
to repor t any fede ral chang es to its taxable income, nor did MetL i fe o we an y additional I llinois income taxes to the Depa rtment, MetL ife obviously was not elig ible to participa te in the amnesty

prog ram. ¶ 59 The result rea ched by the majority leads to absurd results which the leg islature could not possibly have intend ed

. S ee B rucke r v. Merc ola
, 227 I ll. 2d 502, 514 (2007) (“w hen undertaking the interpre tation of a statute, we must presume that when the leg islature enac ted a law, it did not intend to produce absurd, inconvenient or unjust results”). The m ajority ’s interpre tation of the Amnesty Act punishes MetL ife for failing to prepa y an unasce rtainable
amount of taxes befor e those taxes wer e actua lly due to the Depa rtment acc ord i n g t o the provisions of the I ncome Tax Act. Fur ther, the majority ’s rea ding penaliz es M et L i fe with double interest for not paying a tax that the I ncome Tax Act did not require it to pay , and which the Depa

rtment could not have collecte d befor e the audit was conclude d, a time long afte r the amnesty period had ended. The majority ’s construction is inconsi s t en t with the statutory lang uag e of the Act, which targ ets taxpay ers who wer e delinquent at the time of the

amnes t y period. MetL ife is not included in this g roup of taxpay ers. I t is unrea sonable to sug g est that the Gene ral Assembly intended to punish taxpay ers for their inability to predic t a future fede ral c hang e tax liabili ty . I t is therefor e absur d to de fine “all taxes due ” to mean

uncer tain additional tax liability that was not known ei t h er t o the taxpay er or to the Depa rtment during the 2003 amnesty period. ¶ 60 T h e De p ar t m en t m ai n t ains that any absurdities or un ce rt ai n t i es re gar d i n g t h e interpre tation of the Amnesty Act are addre ssed by the Depa rtment’s emer g ency rules promulg ated pursuant to the Act (27 I ll. Reg. 15161 ( emer g ency rule e ff. Sept. 11, 2003)). The rules purport to require taxpay ers to pay their entire tax liabil i t y d u ri n g the amnesty period, “ irrespe ctive of w hether that liability is known to the Depa rtment or the taxpay er,” and require taxpay ers under au d i t during the amnesty prog ram to make a “g ood faith estimate” of

their tax li ability

and to pay

the estimated taxes to the Depa rtment. ¶ 61 T h e De p ar t m en t ’s emer g ency rules impose require ments that g o far bey o n d t h o s e

rec og nized by the 2003 Amnesty Act itself. The Gene ral Assembly direc ted the Depa rtment to adopt rules as ne cessa

ry to implement the Amnesty Act (35 I L CS 745/10 (West 2004)), but did not authorize it to collect taxes even when the Depa rtment does not know if there is

a tax liability

. The Depa

rtment’s regulations improperly require taxpa y er s u n d er audit to g uess the amount of their fede ral chang es in order to avoid the risk of paying double interest

on any shortfall. There is no instruction provided as to how a tax p ay er might g o about making a “g ood faith estimate” of unpaid taxes, particula rly wher e, as in this case , MetL ife

was still neg otiating proposed fede ral adjustments with the I RS well afte r the amnesty period ended. The appellate court below stated that they wer e “unable t o d i scer n any logic al interpre tation” of the Depa rtment’s rules. 2012 I L App (1st) 110400, ¶ 23. I ag ree

. The rules do not dispel the absurdity of the majority ’s interpre tation of the Ac t, they contribute to it. ¶ 62 Be cause MetL ife wa s not a delinquent taxpay er and owed no income tax es t o the state

-16-during the 2003 amnesty period, MetL ife was not e ligible for amnesty and should not have

been subject to a double interest p en al t y

. The majority ’s holding to the contra ry is

unrea sonable a

nd unjust. I there fore dissent.

¶ 63 J USTI CE KARMEI ER joins i n this diss ent.

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