THE PEOPLE ex rel. LISA MADIGAN, Attorney General of the State of Illinois, Plaintiff-Appellant, v. JULIUS KOLE, Personally as Personal Representative and Trustee of the Estate of Anthony F. Crespo, Deceased, Defendant-Appellee.
Docket No. 2-11-0245
Appellate Court of Illinois, Second District
April 11, 2012
2012 IL App (2d) 110245
Appellate Court
People ex rel. Madigan v. Kole, 2012 IL App (2d) 110245
Appellate Court Caption: THE PEOPLE ex rel. LISA MADIGAN, Attorney General of the State of Illinois, Plaintiff-Appellant, v. JULIUS KOLE, Personally as Personal Representative and Trustee of the Estate of Anthony F. Crespo, Deceased, Defendant-Appellee.
District & No.: Second District
Docket No. 2-11-0245
Filed: April 11, 2012
Held: In proceedings on a complaint under the Illinois Estate and Generation-Skipping Transfer Tax Act seeking over $300,000 in additional estate taxes, interest and late-filing penalties arising from an adjustment of deceased‘s estate tax liability, the trial court erred in entering summary judgment for defendant, the executor of the estate, since the Act imposes personal liability on defendant for unpaid additional estate taxes, the certificate of discharge plaintiff issued to defendant did not discharge defendant from personal liability for the additional estate taxes found to be due, and defendant was personally liable for failing to file a supplemental return and pay the additional taxes; therefore, the judgment for defendant was reversed and summary judgment was entered for plaintiff.
(Note: This syllabus constitutes no part of the opinion of the court but has been prepared by the Reporter of Decisions for the convenience of the reader.)
Decision Under Review: Appeal from the Circuit Court of Lake County, No. 09-L-892; the Hon. Jorge L. Ortiz, Judge, presiding.
Counsel on Appeal: Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro, Solicitor General, and Christopher M.R. Turner, Assistant Attorney General, of counsel), for appellant.
Daniel F. Konicek and Michael J. Corsi, both of Konicek & Dillon, P.C., of Geneva, and John W. Quinn, of Churchill, Quinn, Richtman & Hamilton, Ltd., of Grayslake, for appellee.
Panel: PRESIDING JUSTICE JORGENSEN delivered the judgment of the court, with opinion.
Justices Zenoff and Hudson concurred in the judgment and opinion.
OPINION
¶ 1 Plaintiff, Lisa Madigan, the Attorney General of the State of Illinois, on behalf of the People of the State of Illinois, filed a complaint under the Illinois Estate and Generation-Skipping Transfer Tax Act (Act) (
I. BACKGROUND
¶ 2 ¶ 3 Anthony F. Crespo died on July 31, 2002. Prior to his death, he had named defendant as the executor of his estate (estate) and as successor trustee of the Anthony F. Crespo Living Trust Dated April 19, 1993. On April 30, 2003, defendant, acting as executor of the estate
¶ 4 Plaintiff received the estate‘s Illinois estate tax return on November 3, 2003. Plaintiff reviewed the attached federal return to determine the amount of estate tax due (reflected on the federal return as the state death tax credit). On November 5, 2003, plaintiff issued a “Certificate of Discharge and Determination of Tax” (Certificate of Discharge), reflecting that $81,397 was owed in estate taxes. The Certificate of Discharge stated, in part: “On the basis of the information submitted, the [plaintiff] has determined that the Illinois estate tax liability, including any interest and penalties of the estate[,] has been paid.” It further provided: “This certificate is issued and may be exhibited as evidence of (1) the complete release of all the property of this estate from the lien imposed by the Illinois Estate Tax Law and (2) the discharge from personal liability of the executor of this estate for the estate tax, penalties and interest imposed by the Illinois Estate Tax Law.” The estate applied for and received a $45,603 refund.
¶ 5 The IRS subsequently audited the estate‘s federal estate tax return. On August 11, 2006, the IRS issued a “Report of Estate Tax Examination Changes” (IRS Report or Report), stating that the estate‘s state death tax credit increased from $81,3981 to $243,729 (based on the IRS‘s revised calculation of the federal taxable estate from $2,121,623 to $4,405,106).
¶ 6 On September 16, 2009, plaintiff filed a complaint, seeking from defendant the additional estate tax and related interest and late-filing penalties. Plaintiff alleged that no supplemental Illinois estate tax return was ever filed on the estate‘s behalf and that no payment was ever made toward the estate‘s additional Illinois estate tax liability. Based on the 2006 IRS adjustment, plaintiff determined that the estate owed $162,332 in additional Illinois estate tax, a $40,583 late-filing penalty, a $27,596 late-payment penalty (through September 8, 2009), and $103,171 in interest (through the same date), with additional interest and penalties accruing. Plaintiff further alleged that defendant was personally liable for the additional tax, interest, and penalties and noted that requests for payment were issued on May 21, 2007, August 17, 2007, and April 21, 2009.
¶ 7 Defendant moved to dismiss plaintiff‘s complaint, arguing that, through the 2003 Certificate of Discharge, plaintiff had released him from personal liability for any unpaid additional estate tax, penalties, or interest.
¶ 8 On July 21, 2010, plaintiff filed her first of two motions for summary judgment, arguing that, pursuant to section 10 of the Act, defendant was personally liable for the estate‘s unpaid additional estate tax. Specifically, plaintiff argued that defendant, as executor, was personally liable for the unpaid tax liability; a certain amount was due; and the estate failed to pay the additional tax owed. Plaintiff attached to her motion Flores’ affidavit; the estate‘s Illinois estate tax return (with the attached federal estate tax return); and a sample supplemental Certificate of Discharge.
¶ 9 In response, defendant admitted that the estate never paid any additional tax to Illinois or filed a supplemental return, but he objected on hearsay grounds to the contents of the IRS Report. Also, he argued that the 2003 Certificate of Discharge unambiguously released him from personal liability for all estate taxes, including any additional estate tax. Finally, he argued that there was no material factual question on the issue of the amount of any additional tax because the document that plaintiff offered to establish this tax, the IRS Report, constituted hearsay.
¶ 10 In his first of two summary judgment motions, defendant argued that the Act does not impose personal liability for one‘s failure to pay any additional estate tax and, alternatively, that, if the term “Illinois transfer tax” includes “additional tax,” then the 2003 Certificate of Discharge discharged him from all personal liability.
¶ 11 In her reply in support of her summary judgment motion, plaintiff argued that defendant had admitted to the amount of additional tax outstanding and due because, in answers to interrogatories, he admitted that the IRS issued its Report and he did not deny that the document, attached to the complaint, was a copy of the Report.
¶ 12 Plaintiff also asserted that defendant admitted to the estate‘s federal tax liability increase on Form 890, “Waiver of Restrictions on Assessment and Collection of Deficiency and Acceptance of Overassessment-Estate, Gift, and Generation-Skipping Transfer Tax” (Waiver). Dean Solovy, the estate‘s attorney, apparently signed the form, a copy of which plaintiff attached to the motion, on September 7, 2006. The form stated:
“I consent to the immediate assessment and collection of any deficiencies (increase
in tax and penalties) and accept any overassessment (decrease in tax and penalties) shown below, plus any interest provided by law. I understand that by my signing this waiver, a petition to the United States Tax Court may not be made, unless additional deficiencies are determined.”
The form reflected a $975,627 increase in federal tax.
¶ 13 On November 4, 2010, the trial court denied the parties’ first summary judgment motions, finding that summary judgment was precluded by factual issues, including as to the amounts shown on the uncertified copy of the IRS Report (noting foundational issues with its admission).
¶ 14 On December 6, 2010, plaintiff filed her second summary judgment motion, which included certified copies of the IRS Report and the Waiver. In his second summary judgment motion, defendant realleged the arguments he had raised in his first such motion.
¶ 15 The trial court, on February 1, 2011, granted defendant‘s second summary judgment motion and denied plaintiff‘s second summary judgment motion. The court found that sections 6(c) and 10(c) of the Act were not ambiguous and did not impose personal liability on an executor for any additional estate tax owed by an estate. The court stated that, had the General Assembly intended for such liability to attach, it would have clearly provided for it in a tax statute. Further, the court noted that it did not need to reach the questions in plaintiff‘s motion concerning whether plaintiff established the amount of additional tax owed and whether the 2003 Certificate of Discharge absolved defendant of personal liability. Plaintiff appeals.
II. ANALYSIS
A. Standard of Review
¶ 16 ¶ 17 ¶ 18 In this appeal, plaintiff requests that we review the trial court‘s rulings on the parties’ summary judgment motions and consider statutory construction issues. Summary judgment should be granted whenever the pleadings, depositions, admissions, and affidavits on file, viewed in the light most favorable to the nonmoving party, show that there are no disputed material facts between the parties and that the moving party is entitled to judgment as a matter of law. People ex rel. Department of Public Health v. Wiley, 218 Ill. 2d 207, 220 (2006). We review de novo the trial court‘s entry of summary judgment. Id. The construction of a statute is a question of law, which we review de novo. Ries v. City of Chicago, 242 Ill. 2d 205, 216 (2011).
B. Pick-Up Estate Tax Scheme
¶ 19 ¶ 20 Before turning to the arguments raised in this appeal, we review at some length the estate tax scheme in effect in 2002, the year of Crespo‘s death. Under the Internal Revenue Code of 1986, as amended (IRC), an estate was entitled to a tax credit (the state tax credit or state death tax credit) from the federal estate tax for estate taxes paid to any state, up to a
¶ 21 The Illinois pick-up estate tax scheme was codified in the Act. Brooker, 388 Ill. App. 3d at 412-13. Under the statute, taxable transfers of transferred property having a tax situs in Illinois were taxed at the maximum allowable state tax credit under section 2011 or section 2604 of the IRC (
¶ 22 The Act defined “Illinois estate tax” (which, along with the “Illinois generation-skipping transfer tax,” comprised the “Illinois transfer tax“) as “the tax due to this State with respect to a taxable transfer that gives rise to a federal estate tax.”
¶ 23 The Act‘s provisions addressing the duty to file a return and pay the tax were also coupled with federal law. Section 6(c) of the Act identified who was responsible for filing a return (including a supplemental return) and paying the tax (including any additional tax that subsequently became due). It stated:
“The Illinois transfer tax return (including any supplemental or amended return) shall be filed, and the Illinois transfer tax (including any additional tax that may become due) shall be paid by the same person or persons, respectively, who are required to pay the
related federal transfer tax and file the related federal return.” (Emphases added.) 35 ILCS 405/6(c) (West 2002).
See also
¶ 24 Section 7(a) of the Act addressed supplemental returns and provided as follows:
“(a) Supplemental returns. If the State tax credit is increased after the filing of the Illinois transfer tax return, the person or persons required to file the Illinois transfer tax return and pay the Illinois transfer tax shall file a supplemental Illinois transfer tax return. The supplemental return shall be filed and the additional tax shall be paid in the same place and manner as provided in Section 6 of this Act. The due date for the supplemental return and for the payment of the additional tax reported in the supplemental return shall be no later than 3 months after the earliest of:
(1) the date an amended, related federal return is filed;
(2) the date an increase in the federal transfer tax is paid or accepted in writing; or
(3) the date the [IRS] issues a request for evidence of payment of the State tax credit;
provided that if the related federal transfer tax may be deferred or paid in installments, then part or all of the additional Illinois transfer tax may be deferred or paid in installments under rules consistent with subsection (b) of Section 6 of this Act.” (Emphasis added.)
35 ILCS 405/7(a) (West 2002).
See also People ex rel. Burris v. Boeger, 268 Ill. App. 3d 746, 748-49 (1994) (“section 7 of the Act [citation] places an affirmative duty on the taxpayer to file a supplemental Illinois transfer tax return and pay additional tax where the State tax credit is increased after the filing of the Illinois transfer tax return“).
C. Personal Liability
¶ 25 ¶ 26 Turning to the first issue in this appeal, the extent of an executor‘s personal liability, section 10(c) of the Act stated:
“(c) Personal liability. If the Illinois transfer tax is not paid when due, then the person required to file the related federal return and the transferee of any transferred property having a tax situs within this State shall be personally liable for the Illinois transfer tax, to the extent of such transferred property originally received, controlled or transferred to that person or transferee, less the amount of any expenses or charges against the transferred property, related to the taxable transfer, which have a higher priority of payment under applicable law than the Illinois transfer tax.” (Emphasis added.)
35 ILCS 405/10(c) (West 2002).
¶ 27 Plaintiff argues that the Act held defendant, who was required to file the federal return
¶ 28 Plaintiff notes that section 10(c) held the federal filer personally liable for the “Illinois transfer tax” not paid by the estate. As noted, the Act defined “Illinois estate tax” as “the tax due to this State with respect to a taxable transfer that gives rise to a federal estate tax.”
¶ 29 Defendant responds that the General Assembly intentionally refused to create personal liability for any “additional tax” that an estate might owe after the filing of an initial transfer tax return. He urges that the statute unambiguously distinguished between the “Illinois transfer tax” and the “additional tax” and did not impose personal liability for the “additional tax.” Defendant points to sections of the statute that refer to a supplemental return and the additional tax. Specifically, in addition to the sections quoted above, defendant notes that section 8 of the Act, which contained the statute‘s penalty provisions, provided:
“(a) Failure to file return. In case of failure to file any return required under this Act with the Attorney General by the due date, unless it is shown that the failure to file is due to a reasonable cause, there shall be added to the amount required to be shown as tax on the return 5% of the amount of that tax (or 5% of the additional tax due in the case of a supplemental return) if the failure is for not more than one month from the due date, with an additional 5% for each additional month or fraction of a month thereafter during which the failure to file continues, not exceeding in the aggregate 25% of the tax or, in the case of a supplemental return, 25% of the additional tax.
(b) Failure to pay tax. In the case of failure to pay the amount of tax shown due on any return required under this Act on or before the due date for payment of that tax, unless it is shown that the failure to pay is due to reasonable cause, there shall be added to the unpaid amount of the tax 0.5% of that unpaid amount if the failure is not more than one month from the due date, with an additional 0.5% for each additional month or fraction of a month thereafter during which the failure to pay continues, not exceeding in the aggregate 25% of the unpaid amount.” (Emphases added.)
35 ILCS 405/8(a) ,(b) (West 2002).
¶ 30 The fundamental rule of statutory construction is to ascertain and give effect to the legislature‘s intent. Michigan Avenue National Bank v. County of Cook, 191 Ill. 2d 493, 503-04 (2000). The best indication of legislative intent is the statutory language, given its plain and ordinary meaning. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 479 (1994). Where the language is clear and unambiguous, we must apply the statute without resort to further aids of statutory construction. Davis v. Toshiba Machine Co., America, 186 Ill. 2d 181, 184-85 (1999). However, if the statutory language is ambiguous or unclear, this court may look beyond the Act‘s language to ascertain its meaning. In re D.D., 196 Ill. 2d 405, 419 (2001). A statute is ambiguous if it is capable of more than one reasonable interpretation. County of Du Page v. Illinois Labor Relations Board, 231 Ill. 2d 593, 604 (2008). “‘[S]tatutes imposing a tax are strictly construed against the government and in favor of the taxpayer.‘” Brooker, 388 Ill. App. 3d at 416 (quoting In re Consolidated Objections to Tax Levies of School District No. 205, 193 Ill. 2d 490, 496 (2000)). However, in order to effectuate the legislature‘s intent, “they must be given a reasonable construction, without bias or prejudice against either the state or the taxpayer.” (Internal quotation marks omitted.) Id.
¶ 31 In evaluating whether a statute is ambiguous, a court reads the statute as a whole. See Hytel Group, Inc. v. Butler, 405 Ill. App. 3d 113, 124-25 (2010); La Salle Partners, Inc. v. Illinois Property Tax Appeal Board, 269 Ill. App. 3d 621, 626 (1995) (statute is read as a whole, giving words their plain and ordinary meaning; “statutory language should not be read in isolation“). Reading the statute as a whole, we conclude that section 10(c) of the Act unambiguously imposed on a federal filer personal liability for failure to pay any additional estate tax. We reject defendant‘s argument that the absence of the term “additional tax,” or even “supplemental return,” in section 10(c) reflects that the provision does not incorporate it. Reading the Act as a whole, it is clear that “Illinois transfer tax” incorporates any “additional tax,” even where “additional tax” is not specifically mentioned.
¶ 32 Section 6(c) of the Act imposes on a federal filer the duty to pay all estate taxes and file all returns for the estate. It states that the “Illinois transfer tax return (including any supplemental or amended return) shall be filed, and the Illinois transfer tax (including any additional tax that may become due) shall be paid by” the federal filer.
¶ 33 In summary, reading the statute as a whole, it is clear that section 10(c) unambiguously imposes on the federal filer personal liability for the failure to pay any additional tax.
D. 2003 Certificate of Discharge
¶ 34 ¶ 35 Although not addressed by the trial court, we next assess the import of the 2003 Certificate of Discharge, which defendant raised as an affirmative defense in his summary judgment motion. Here, defendant argues that, even if the Act creates only one Illinois transfer tax, the 2003 Certificate of Discharge was a full, final, and complete discharge of his personal liability for the additional estate tax (and related penalties and interest).
¶ 36 The 2003 Certificate of Discharge stated, in part: “On the basis of the information submitted, the [plaintiff] has determined that the Illinois estate tax liability, including any interest and penalties of the estate[,] has been paid.” It further provided: “This certificate is issued and may be exhibited as evidence of (1) the complete release of all the property of this estate from the lien imposed by the Illinois Estate Tax Law and (2) the discharge from personal liability of the executor of this estate for the estate tax, penalties and interest imposed by the Illinois Estate Tax Law.”
¶ 37 Defendant points to section 10(e) of the Act, which stated:
“(e) Waiver of Lien and personal liability. If the Attorney General is satisfied that no liability for Illinois transfer tax exists or that the Illinois transfer tax has been fully discharged or provided for, the Attorney General shall issue a certificate releasing all of the transferred property having a tax situs within the State of Illinois from the lien imposed by this Section. Issuance of such certificate shall discharge the person required to file the related federal return and any transferee from personal liability for the Illinois transfer tax.” (Emphases added.)
35 ILCS 405/10(e) (West 2002).
Defendant asserts that section 10(e) of the Act unambiguously instructs that the Attorney General is to determine the amount of tax due from an estate, satisfy herself that the tax due, if any, is paid, and issue one certificate to release the lien and discharge personal liability. Defendant urges that the “Illinois transfer tax” was due when plaintiff “determined” that the amount due was only $81,397, which arose upon Crespo‘s death in 2002. Further, he claims that, effective November 5, 2003, the 2003 Certificate of Discharge unambiguously discharged him from personal liability for the transfer tax, whether that tax was $81,397 or
¶ 38 Plaintiff argues that the 2003 Certificate of Discharge did not discharge defendant from personal liability for additional estate tax and related penalties and interest not reported in the original Illinois estate tax return. Plaintiff contends that defendant‘s position ignores the certificate‘s express language, as well as that of the Act, and urges that the certificate neither referred to nor contemplated the discharge of unknown, future tax liabilities that subsequently arose from IRS adjustments. Plaintiff notes that the certificate specified that it was issued on “the basis of the information submitted” and that it discharged the existing $81,397 Illinois estate tax liability. By its express terms, the certificate did not discharge defendant from any future tax liabilities. Plaintiff notes that, when the certificate was issued, plaintiff was not aware that the Illinois estate tax return undervalued the estate or that the IRS would later increase the state tax credit. It was not until three years later that the IRS increased the credit.
¶ 39 Alternatively, if the statute is ambiguous, plaintiff notes that her practice has been to issue a certificate after the federal filer has paid the reported tax in an original Illinois estate tax return4 and to issue a supplemental certificate discharging the federal filer from personal liability for any additional estate tax, and she asserts that this court should defer to her interpretation of the statute, since plaintiff is charged with the statute‘s administration and enforcement. Finally, plaintiff urges that, if a Certificate of Discharge discharges all future liabilities and liens, then it would negate the Act‘s enforcement provisions and preclude plaintiff‘s actions to collect any additional tax arising from an IRS adjustment. With no liability for any such additional tax, the federal filer, plaintiff contends, would have little incentive to report IRS adjustments through a supplemental return or to ensure that the estate was accurately valued in the original tax return.
¶ 40 We first conclude that the 2003 Certificate of Discharge did not discharge defendant from personal liability for the additional estate tax that became due as a result of the IRS audit. Clearly, as plaintiff notes, the certificate itself applied only to the liability reflected therein and the figures and information upon which that liability was calculated. It stated that it was issued “[o]n the basis of the information submitted” and listed only the estate‘s initial $81,397 Illinois estate tax liability. If the information submitted was inaccurate, then the certificate could not effect a “discharge from personal liability” for all estate taxes determined to be owed.
¶ 41 Second, we conclude that the statute does not mandate a different result. Section 10(e) does not limit plaintiff to issuing only one certificate for an estate and makes no reference to the “Illinois transfer tax” having been finally discharged. If the General Assembly had intended that only one certificate issue, it could have included language clarifying that plaintiff could issue a certificate only after a liability was fully and finally determined (presumably upon the expiration of the statute of limitations for collection of any additional tax). The provision contains no such language.
E. Plaintiff‘s Summary Judgment Motion
¶ 43 ¶ 44 Addressing her summary judgment motion, plaintiff next argues that there is no genuine issue of material fact as to whether defendant is personally liable for the estate‘s $162,332 in unpaid Illinois estate tax and related penalties and interest. Plaintiff asserts that, pursuant to section 10(c) of the Act, the following elements are satisfied: (1) defendant was “the person required to file the related federal return” of the estate; (2) the estate owed Illinois estate tax in a certain amount; and (3) the amount owed was not paid when due.
¶ 45 Again, section 7(a) of the Act provided, in relevant part, that, if “the State tax credit is increased after the filing of the Illinois transfer tax return, the person or persons required to file the Illinois transfer tax return and pay the Illinois transfer tax shall file a supplemental Illinois transfer tax return.”
“I consent to the immediate assessment and collection of any deficiencies (increase in tax and penalties) and accept any overassessment (decrease in tax and penalties) shown below, plus any interest provided by law. I understand that by my signing this waiver, a petition to the United States Tax Court may not be made, unless additional deficiencies are determined.”
¶ 46 Plaintiff argues that the certified copies of the foregoing documents (which included the stamp and raised seal of the Chicago IRS office and the handwriting of a disclosure specialist, specifying the number of pages, the date, and her signature and title) are admissible and show that the estate owes an additional $162,332 in Illinois estate tax. Plaintiff notes that defendant admitted in his answer to the complaint that the IRS issued its Report (which reflected a $162,332 increase in the estate‘s allowable state tax credit, from $81,397 to $243,729). According to plaintiff, through the Waiver, the estate accepted the
¶ 47 Evidence such as hearsay, which is inadmissible at trial, is not admissible in support of or in opposition to a summary judgment motion. Dangeles v. Muhlenfeld, 191 Ill. App. 3d 791, 799-800 (1989). Basic rules of evidence require that a party lay a proper foundation for the introduction of a document into evidence. Gardner v. Navistar International Transportation Corp., 213 Ill. App. 3d 242, 247-48 (1991). To properly authenticate a document, a party must present evidence that demonstrates that the document is what the party claims it to be. Id.
¶ 48 Under Rule 902(1), certain evidence is self-authenticating and extrinsic evidence of its authenticity is not a prerequisite to its admission, where the document constitutes:
“(1) Domestic Public Documents Under Seal. A document bearing a seal purporting to be that of the United States, or of any State, district, *** or of a political subdivision, department, officer, or agency thereof, and a signature purporting to be an attestation or execution.” (Emphases added.) Ill. R. Evid. 902(1) (eff. Jan. 1, 2011).
¶ 49 In federal tax challenges, the authenticity and certifications of certified copies of forms similar to the Report have been deemed sufficient under similarly worded federal rules. See, e.g., Hughes v. United States, 953 F.2d 531, 539-40 (9th Cir. 1992) (in action seeking to stop IRS collection and addressing authenticity and certification of IRS Forms 4340 (“Certificate of Assessments and Payments“), court held that the documents were admissible as self-authenticating public documents under Federal Rule of Evidence 902(1)5 (Fed. R. Evid. 902(1)) because they were certified under seal and bore an appropriate signature, regardless of which certifying form was utilized); see also Schmidt v. Internal Revenue Service, 717 F. Supp. 763, 764 (D. Kan. 1989) (Form 4340 not hearsay; “certified public documents are
¶ 50 Here, as plaintiff notes, defendant does not appear to dispute that the IRS Report and the Waiver were properly certified under seal to establish the authentication required for admission. Based on this and the foregoing persuasive authority, we conclude that the documents are self-authenticating public documents under Rule 902(1).
¶ 51 Although certified copies of documents such as the Report and the Waiver are self-authenticating, the documents must nevertheless fit within other rules of evidence, such as the hearsay rule. In re Garm, 114 B.R. 414, 416 (Bankr. M.D. Pa. 1990); Christopher B. Mueller & Laird C. Kirkpatrick, 5 Federal Evidence § 9:30 (3d ed. 2011) (“The self-authentication provisions of Fed. R. Evid. 902(1) to (4) complement the broad hearsay exceptions for public records found in Fed. R. Evid. 803. *** If a document is introduced to prove what it asserts, however, no combination of signature, certificate, or seal can make it admissible if it does not satisfy the requirements of one of the hearsay exceptions.“).
¶ 52 Turning to the hearsay issue, Rule 803 provides that certain evidence is not excluded as hearsay, even though the declarant is available as a witness. Rule 803(8), which contains the public records exception to the hearsay rule, states:
“(8) Public Records and Reports. Records, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth (A) the activities of the office or agency, or (B) matters observed pursuant to duty imposed by law as to which matters there was a duty to report, excluding, however, police accident reports and in criminal cases medical records and matters observed by police officers and other law enforcement personnel, unless the sources of information or other circumstances indicate lack of trustworthiness.” Ill. R. Evid. 803(8) (eff. Jan. 1, 2011).
¶ 53 Plaintiff contends that the Report and the Waiver are excepted from the hearsay rule under Rule 803(8) because they are public reports and records setting forth both the activities of the IRS and matters observed pursuant to its legal duties. The Report, according to plaintiff, sets forth the IRS‘s findings from its audit of the estate‘s federal estate tax return pursuant to the agency‘s statutory mandate and the Internal Revenue Manual.
¶ 54 Defendant argues that the Report and the Waiver are not admissible under Rule 803(8) as public records because they do not set forth the activities of the agency or matters observed pursuant to any legal duty. According to defendant, the Report challenges the estate‘s valuation of certain property and, thus, constitutes a position paper by the IRS setting forth its opinion that the estate‘s valuation was flawed. Similarly, defendant argues that the Waiver does not set forth any IRS activities and is not a matter it observed pursuant to a legal duty, but instead purports to be an activity undertaken by Solovy. Further, defendant argues that, even if the Report is excepted from the hearsay rule, the federal estate tax return submitted by the estate, which sets forth a different valuation for the estate, raises a factual
¶ 55 As to the Report, no case has addressed the admissibility of such a document over a hearsay objection. However, federal case law involving actions seeking to stop IRS collections reflects that certified copies of similar IRS reports used to substantiate tax liabilities are admissible under the similarly worded Federal Rule of Evidence 803(8).6 See, e.g., Rossi v. United States, 755 F. Supp. 314, 317 (D. Or. 1990) (certified copies of “Forms 4340 are not hearsay because these records fit within the ‘public records’ exception” of Federal Rule of Evidence 803(8)), aff‘d, 983 F.2d 1077 (9th Cir. 1993) (table); Schmidt, 717 F. Supp. at 764 (certified copies of Form 4340 not inadmissible hearsay; documents are proper and admissible under Federal Rules of Evidence 902(1) and 803(8)).
¶ 56 Based on the foregoing persuasive authority, we conclude that the IRS Report and the Waiver are admissible as public records. As to defendant‘s argument that plaintiff did not lay a proper foundation for the documents’ admission, we note that this requirement does not apply to self-authenticating public records. United States v. Loyola-Dominguez, 125 F.3d 1315, 1318 (9th Cir. 1997) (“the [federal] public records exception is one of the few hearsay exceptions that does not require a foundation” since the documents are presumed trustworthy); 2 Robert J. Steigmann & Lori A. Nicholson, Illinois Evidence Manual § 9:14 (4th ed. 2006) (“The proponent of a public record that is not self-authenticating must lay an adequate foundation.“); see also 4 Christopher B. Mueller & Laird C. Kirkpatrick, Federal Evidence § 8:92 (3d ed. 2011) (burden on objecting party to show record is untrustworthy).
¶ 57 Responding to defendant‘s suggestion that he may challenge the Report‘s determination of the estate‘s value, plaintiff contends that the Act does not require her to prove that the IRS correctly determined the estate‘s value under the IRC. Rather, the tax owed under the Act is calculated from the estate‘s value as finally determined in the federal estate tax process.
¶ 58 For similar reasons, we reject defendant‘s argument that plaintiff needed (and failed) to establish that Solovy was authorized to execute the Waiver. As plaintiff notes, the IRS finally determined the increase in the estate‘s state tax credit and, via the Waiver, defendant accepted this determination. Defendant asserts that plaintiff implicitly tried to admit the Waiver as an admission by a party opponent. He argues that: (1) the certified copy of the Waiver that plaintiff filed in the trial court is an incomplete copy of the form; (2) no evidence was presented to show that Solovy actually signed the form; and (3) plaintiff did not produce an IRS Form 2848 (power of attorney) authorizing Solovy to sign the Waiver. We reject this claim. As to defendant‘s first argument, we note that both the certified copy of the Waiver and a blank form thereof that defendant offers for comparison consist of two pages (and the IRS certification states that the certified copy consists of two pages). The certified copy, however, appears to be missing a portion of the final sentence in the document. The missing portion is part of a paragraph reciting signature instructions. The relevant sentence, with the missing language emphasized, states: “An attorney or agent may sign this waiver provided the action is specifically authorized by a power of attorney which, if not previously filed, must accompany this form.” (Emphasis added.) The fact that a portion of an instructional provision has been cut off of a certified copy of an IRS document is not, in and of itself, material or of consequence here. Indeed, the focus of defendant‘s argument is that the Waiver is incomplete because it does not also contain a copy of a power of attorney, which the omitted language references. We find this argument, too, unavailing. First, the omitted instruction does not require that a power of attorney be attached to the Waiver in all cases; rather, the attorney or agent signing the Waiver need not attach it if a power of attorney was “previously filed.” Second, we emphasize that defendant does not essentially challenge the document‘s authenticity (i.e., he does not argue that it is not a copy of the Waiver the IRS has on file). Rather, he contends that plaintiff failed to produce any evidence showing that Solovy actually signed the form and that, if he did, a copy of the power of attorney is on file
¶ 59 As defendant does not raise this argument, we leave for another day the question whether both the Report and the Waiver are necessary to establish an increase in the state tax credit or whether the Report alone is sufficient.
¶ 60 In summary, the certified copies of the Report and the Waiver (in the absence of any indication that a power of attorney was not on file with the IRS) are properly authenticated and admissible under the public records exception to the hearsay rule to show that the estate owed additional Illinois estate tax in a certain amount. Accordingly, the trial court erred in denying plaintiff‘s summary judgment motion.
¶ 61 ¶ 62 In conclusion, the circuit court erred in granting summary judgment in defendant‘s favor and denying it in plaintiff‘s favor. The judgment of the circuit court of Lake County is reversed, and summary judgment is entered in plaintiff‘s favor.
¶ 63 Reversed.
Notes
“The following items of evidence are self-authenticating; they require no extrinsic evidence of authenticity in order to be admitted:
(1) Domestic Public Documents That Are Sealed and Signed. A document that bears:
(A) a seal purporting to be that of the United States; any state, district, commonwealth, territory, or insular possession of the United States; the former Panama Canal Zone; the Trust Territory of the Pacific Islands; a political subdivision of any of these entities; or a department, agency, or officer of any entity named above; and
(B) a signature purporting to be an execution or attestation.” Fed. R. Evid. 902(1).
“(8) Public Records. A record or statement of a public office if:
(A) it sets out:
(i) the office‘s activities;
(ii) a matter observed while under a legal duty to report, but not including, in a criminal case, a matter observed by law-enforcement personnel; or
(iii) in a civil case or against the government in a criminal case, factual findings from a legally authorized investigation; and
(B) neither the source of [the] information nor other circumstances indicate a lack of trustworthiness.” Fed. R. Evid. 803(8).