              IN THE SUPREME COURT OF IOWA
                              No. 12–1542

                        Filed November 22, 2013


STATE OF IOWA,

      Appellant,

vs.

MARC A. HAGEN,

      Appellee.



      Appeal from the Iowa District Court for Bremer County, Colleen D.

Weiland, Judge.



      The State seeks discretionary review of a district court’s denial of

penalties and interest in a restitution order arising from a criminal

defendant’s guilty pleas for failure to file or pay taxes. REVERSED AND

REMANDED WITH INSTRUCTIONS.



      Thomas J. Miller, Attorney General, Martha E. Trout, Assistant

Attorney General, and Kasey E. Wadding, County Attorney, for appellant.



      John W. Holmes of Holmes & Holmes, Waterloo, for appellee.
                                           2

ZAGER, Justice.

      Marc Hagen pled guilty to four counts of fraudulent practices,

willful failure to file or pay taxes, in violation of Iowa Code section

422.25(1)(5) (2005).1       The State sought as restitution Hagen’s unpaid

taxes, penalties, and interest.          The district court, after a restitution

hearing, ordered Hagen to pay restitution in the form of unpaid taxes,

but denied the State’s request for penalties and interest as part of the

restitution order.       The State claims the district court erred by not

ordering Hagen to pay the statutory penalties and statutory interest as
part of the restitution order. For the reasons set forth below, we reverse

the district court and remand for further proceedings consistent with this

opinion.

      I. Background Facts and Proceedings.

      Marc Hagen was charged with four counts of fraudulent practices

for willfully failing to file his Iowa income tax returns and pay taxes for

years 2006 through 2009.            The State alleged violations of Iowa Code

section 422.25(1)(5). Three of the counts were class “D” felonies because

the alleged amount of Hagen’s unpaid tax obligation for three of the years

exceeded $1000. One count was an aggravated misdemeanor because

Hagen’s unpaid tax obligation for one of the years was greater than $500,

but less than $1000.          For the same period of years, the State also

charged Hagen with four counts of tax evasion in violation of Iowa Code

section 422.25(1)(8).       These counts were all punishable as class “D”

felonies.

      In February 2012, the State offered to dismiss the four counts of

tax evasion in exchange for Hagen’s guilty pleas to the four counts of


      1Unless   otherwise noted, all references are to the 2005 Iowa Code.
                                         3

fraudulent practices for failing to file tax returns and pay the taxes.

Under the terms of the plea agreement, Hagen was required to pay

restitution to the Treasurer of the State of Iowa.

       The following month, Hagen entered written guilty pleas to the four

counts of fraudulent practices. In April 2012, the district court engaged

Hagen in a plea colloquy during which Hagen acknowledged that, for

each of the years from 2006 through 2009, he willfully failed to file Iowa

individual income tax returns and failed to pay the taxes. The district

court accepted Hagen’s guilty pleas.
       On April 27, 2012, the State filed a statement of restitution seeking

restitution of $20,385.19.       Accompanying the statement of restitution

was a summary prepared by the Iowa Department of Revenue

(department) explaining the amounts sought as restitution. For each of

the years from 2006 through 2009, the State sought unpaid taxes,

penalties, and interest.      In total, the State sought $10,355 in unpaid

taxes, $8237.40 in penalties representing a seventy-five percent civil

fraud penalty and a “2210 penalty,”2 and $1792.79 in interest, which

was calculated through June 2012.              Hagen initially objected to the

statement of restitution on the ground that he lacked the ability to pay

restitution.

       On May 29, 2012, the district court sentenced Hagen to five years

in prison for the three felony counts of fraudulent practices and two

years in prison for the aggravated misdemeanor count of fraudulent

practices. The sentences were to run concurrently. The district court

suspended the sentences and fines and placed Hagen on supervised

probation. The court also ordered that Hagen pay restitution. The court

       2The “2210 penalty” is a percentage penalty imposed on individuals who fail to
make required quarterly estimated tax payments. See Iowa Admin. Code r. 901—49.6.
                                     4

reserved its determination of the amount of restitution for a later

hearing.

      At the restitution hearing conducted on July 23, 2012, the State

submitted the summary prepared by the department.           The State also

provided the testimony of the department auditor who prepared the

summary. The auditor explained the summary and how she calculated

the amount of unpaid taxes, penalties, and interest sought by the State.

The State reiterated its request that the court order Hagen to pay

$20,385.19 in restitution. Hagen objected to the imposition of interest
and the fraud penalty as parts of the order for restitution. Hagen also

asserted the department was not a “victim” for purposes of restitution.

      After the hearing, the court entered its restitution order. It ordered

Hagen to pay as restitution $10,355, which represented unpaid taxes

due for the years 2006 through 2009. The court concluded, however,

that it could not require Hagen, as part of a criminal restitution order, to

pay either the penalties or interest sought by the State. The court thus

denied the State’s request for $8237.40 in penalties and $1792.79 in

interest.   The State sought discretionary review of the district court’s

ruling denying the State’s request for penalties and interest in the

restitution order. We granted discretionary review.

      II. Issues on Appeal.

      There are three issues on appeal. First, we must decide whether

the State is a victim for purposes of the restitution statute. Second, we

must determine whether the district court erred by failing to order

penalties as part of the restitution order.      Finally, we must decide

whether the court erred by failing to impose interest on the unpaid taxes
as part of the restitution order.
                                            5

       III. Standard of Review.

       We review restitution orders for correction of errors at law. State v.

Jenkins, 788 N.W.2d 640, 642 (Iowa 2010). In reviewing a restitution

order “we determine whether the court’s findings lack substantial

evidentiary support, or whether the court has not properly applied the

law.” State v. Bonstetter, 637 N.W.2d 161, 165 (Iowa 2001). Questions

of statutory interpretation also are reviewed for correction of errors at

law. State v. Romer, 832 N.W.2d 169, 174 (Iowa 2013).

       IV. Discussion.
       A. Other Arguments of the Defendant.                   Before discussing the

issues preserved in this appeal, we will address two additional

arguments raised by Hagen for the first time in this appeal.

       1. Lack of sufficient information.           Hagen does not dispute the

underlying amount of unpaid Iowa taxes assessed against him as part of

the restitution order.3         Rather, Hagen first insists that he lacked

sufficient information at the time of the July 23 restitution hearing to

determine whether the amounts sought by the State as restitution were

correct. We disagree.

       Iowa Code section 910.3 requires the prosecution’s statement of

restitution to be submitted “no later than thirty days after sentencing.”

Iowa Code § 910.3 (emphasis added). The record clearly discloses the

State filed its statement of restitution with the sentencing court on April


       3Hagen    did not file an appeal or cross-appeal on the issue of the underlying tax
due of $10,355 as determined by the district court. Therefore, this issue has not been
preserved for appeal. See State v. Hernandez-Lopez, 639 N.W.2d 226, 233 (Iowa 2002)
(requiring party to raise issue with district court, get a ruling from the district court,
and raise the issue again on appeal). Hagen’s failure to preserve this issue for appeal
does not, however, diminish his right to seek modification of his restitution plan under
Iowa Code section 910.7. See Iowa Code § 910.7. This section “permits an offender
who is dissatisfied with the amount of restitution required by the plan to petition the
district court for a modification.” State v. Swartz, 601 N.W.2d 348, 354 (Iowa 1999).
                                           6

27, 2012, more than a month before Hagen was sentenced on May 29,

and nearly three months before the restitution hearing.                    The State

attached to its statement of restitution an exhibit prepared by a

department auditor explaining the amounts the State sought and the

calculations used to determine the amounts. Hagen filed an objection to

restitution on May 17, but then argued only that he could not afford to

pay restitution.

       At the restitution hearing on July 23, the court accepted into

evidence the same exhibit the State had attached to the initial statement
of restitution.    The auditor who prepared the exhibit testified at the

restitution hearing, and Hagen’s attorney cross-examined her.                       We

conclude that Hagen had both sufficient information and sufficient

opportunity to determine whether the restitution amounts sought by the

State were correct.

       2. Lack of sufficient proof. Hagen argues the State did not prove

he had the requisite intent to support imposition of the seventy-five

percent civil fraud penalty. See id. § 421.27(4)(a) (requiring assessment

of a seventy-five percent penalty “[i]n case of willful failure to file a return

. . . with the intent to evade tax”). There is serious doubt whether Hagen

successfully preserved this issue for appeal. From a review of the record,

it is questionable whether Hagen urged the sufficiency issue at the

restitution hearing.4 See Johnston Equip. Corp. of Iowa v. Indus. Indem.,

489 N.W.2d 13, 16 (Iowa 1992) (holding that “a successful party need not

cross-appeal to preserve error on a ground urged but ignored or rejected

in trial court”). In any event, we conclude the State did prove Hagen had

the requisite intent to support imposition of the civil fraud penalty.

       4Hagen’s  attorney stated, “I don’t think there’s a—there was a fraudulent intent
not to pay tax.” This is the only statement in the record on this issue.
                                     7

      The State must prove fraud by clear and convincing evidence.

Clark v. Iowa Dep’t of Revenue & Fin., 644 N.W.2d 310, 318 (Iowa 2002).

Hagen, a dentist, explains his failures to file or pay his Iowa income taxes

as   bad   accounting   and    business   practices,   combined    with   a

misunderstanding of the tax laws. But Hagen did understand the law;

he just chose to disregard it. During the plea colloquy conducted in April

2012, the result of which was Hagen’s conviction on four counts of

fraudulent practices, Hagen admitted understanding that he had to file

tax returns. In spite of appreciating his obligation, he also admitted that
he decided not to file his returns. Further, the minutes of testimony filed

with the State’s trial information, which Hagen consented to as further

factual support for his pleas, revealed a longer period of unfiled tax

returns and unpaid taxes than those years for which he was charged and

ultimately convicted. Years of failing to file or pay his taxes resulted in

large balances of unpaid state and federal taxes. Hagen’s failure to pay

his Iowa income taxes, or even to file his tax returns, cannot be

attributed simply to a lack of sophistication and a misunderstanding of

the law.   This was not excusable neglect, but fraudulent practices to

which he pled guilty. Hagen’s failures to file or pay taxes demonstrate

his intent to evade taxes.     The State provided clear and convincing

evidence to support the imposition of the civil fraud penalty.

      B. State as Victim. Hagen asserts that the State is not a victim

under Iowa Code chapter 910. Iowa Code section 910.2 mandates that

courts shall order restitution to be made by offenders “to the victims of

the offender’s criminal activities.” Iowa Code § 910.2. Id. § 910.1(5). He

contends that because the State is a party to this case, it cannot also be
a victim for purposes of restitution. The State argues that Iowa courts

have repeatedly upheld restitution orders requiring repayment of
                                        8

damages to governments and other entities. Therefore, the State insists

it is entitled to restitution.

       All three issues on appeal turn on statutory interpretation.            To

resolve the issues, we must begin with the statutes in question.              See

McGill v. Fish, 790 N.W.2d 113, 118 (Iowa 2010) (explaining that when

resolving issues of statutory interpretation, “the statute in dispute is our

starting point”). “When we interpret a criminal statute, our goal ‘is to

ascertain legislative intent in order, if possible, to give it effect.’ ” State v.

Finders, 743 N.W.2d 546, 548 (Iowa 2008) (quoting State v. Conley, 222
N.W.2d 501, 502 (Iowa 1974)). We will look no further than a statute’s

express terms when its language is clear. Id. We adhere to the rule of

lenity, which guides us to resolve ambiguous criminal statutes in favor of

the accused.     See Romer, 832 N.W.2d at 176 (noting that we resolve

ambiguities in criminal statutes in favor of the accused); State v. Hearn,

797 N.W.2d 577, 585 (Iowa 2011) (explaining the rule of lenity).

Although we resolve ambiguities in favor of the accused, criminal

statutes nevertheless “must be construed reasonably and in such a way

as to not defeat their plain purpose.” State v. Peck, 539 N.W.2d 170, 173

(Iowa 1995). “Finally ‘the legislature may define the terms it uses, and

when it does, those definitions are the foundation of our analysis.’ ”

Zimmer v. Vander Waal, 780 N.W.2d 730, 733 (Iowa 2010) (quoting State

v. Kamber, 737 N.W.2d 297, 299 (Iowa 2007)).

       One purpose of restitution is to compensate victims of crime. See

Bonstetter, 637 N.W.2d at 166 (explaining that restitution “serves

multiple purposes” including compensation); Teggatz v. Ringleb, 610

N.W.2d 527, 529 (Iowa 2000) (explaining that “the purpose of the
restitution statute is to protect the public by compensating victims of

criminal activities”). Generally, when ordering restitution, a court must
                                            9

first identify the victim entitled to restitution. Bonstetter, 637 N.W.2d at

165. A “victim,” for purposes of Iowa Code chapter 910, is “a person who

has suffered pecuniary damages as a result of the offender’s criminal

activities.” Iowa Code § 910.1(5). Other than exceptions inapplicable in

this case, “[p]ecuniary damages” are “all damages to the extent not paid

by an insurer, which a victim could recover against the offender in a civil

action arising out of the same facts or event.”5              Id. § 910.1(3).      There

must be a causal relationship between the damages the victim suffers

and the conduct for which the defendant is ultimately convicted.
Bonstetter, 637 N.W.2d at 165; Earnest v. State, 508 N.W.2d 630, 633

(Iowa 1993); State v. Holmberg, 449 N.W.2d 376, 377 (Iowa 1989); State

v. Starkey, 437 N.W.2d 573, 574 (Iowa 1989).

       This court has not had the opportunity to explore specifically

whether the State may be a victim under the definition set forth in Iowa

Code section 910.1(5). The court of appeals has examined the issue and

concluded that “[t]he State or a governmental agency may be a victim

entitled to restitution.”      State v. Stewart, 778 N.W.2d 62, 64 (Iowa Ct.

App. 2009); see also State v. Wagner, 484 N.W.2d 212, 220 (Iowa Ct.

App. 1992) (remanding case to trial court for entry of reduced restitution

order requiring defendant to repay the state). In Stewart, however, the


        5We do not view Iowa Code section 910.1(3) as imposing a requirement that, in

order to recover pecuniary damages, the victim must first have satisfied all procedural
prerequisites to a civil suit. That is, we do not interpret the language “could recover
against the offender in a civil action,” Iowa Code § 910.1(3), to require that, before the
State may receive restitution in this criminal tax case, the Iowa Department of Revenue
must first exhaust administrative remedies. See Iowa Code §§ 422.28, .29 (permitting
judicial review director’s actions regarding tax appeal); id. § 17A.19(1) (mandating that
parties first exhaust administrative remedies before seeking judicial review). Rather, we
interpret the restitution statute to be an alternative remedy available to the department.
See Iowa Code § 422.26(8) (“The attorney general shall, upon the request of the director,
bring an action at law or in equity, as the facts may justify, without bond, to enforce
payment of any taxes and penalties . . . .”).
                                    10

court of appeals limited the instances in which the state may be a victim

for purposes of Iowa Code chapter 910 to those where the state “suffered

a direct economic loss as a result of the crime.” Stewart, 778 N.W.2d at

64 (holding that the Medicaid program was not a victim entitled to

restitution for expenses paid for an assault victim’s medical treatment).

      In Stewart, the court of appeals did not cite State v. Stessman, 460

N.W.2d 461 (Iowa 1990) for its conclusion that to be a victim the state

must have suffered a direct economic loss. We did, however, allude to

that principle in Stessman, though in that case the putative victim was a
business entity, not the state. Stessman, 460 N.W.2d at 463–64. In that

case, due to Stessman’s criminal deception, Dick Witham Chevrolet

performed repairs on Stessman’s car, and General Motors ultimately

reimbursed Dick Witham for the cost of those repairs. Id. at 464 The

court ordered Stessman to pay restitution.        Id. at 463.    Stessman

challenged the restitution order, arguing that General Motors was not a

victim under the restitution statute. See id. at 464. Without analyzing

the statutory language, we concluded that General Motors was a victim

because the “defendant’s actions caused direct financial harm to General

Motors.” Id.

      In this case, we need not decide whether the State must have

suffered direct financial harm to be entitled to restitution. The State fits

within the definition of “victim” for purposes of Iowa Code chapter 910.

A victim under Iowa Code section 910.1 is “a person who has suffered

pecuniary damages as a result of the offender’s criminal activities.” Iowa

Code § 910.1(5).    Because Iowa Code section 910.1 does not define

“person,” we apply Iowa Code section 4.1, which provides that the
statutory term “person” includes “government.”      See id. § 4.1(20); see

also Arends v. Iowa Select Farms, L.P., 556 N.W.2d 812, 815 (Iowa 1996)
                                    11

(applying Iowa Code section 4.1 where a statute did not define “person”

and interpreting “person” to include a business entity). Hagen’s failure

to file or pay his taxes deprived the State of tax revenue, thus causing

the State pecuniary damages as a result of his criminal activity.      See

Clark, 644 N.W.2d at 318 (explaining that one purpose of the civil fraud

penalty imposed on tax evaders is to compensate the state for actual lost

tax revenue). Clearly, there is a direct causal relationship between the

damages the State suffered, in the form of lost tax revenue, and the

conduct for which Hagen was convicted, the failure to file or pay his
taxes. See Starkey, 437 N.W.2d at 574 (requiring a causal connection

between victim’s damages and conduct for which the defendant was

convicted).

      Moreover, as the State pointed out in its brief, our previous

restitution cases have not interpreted the word “person” in Iowa Code

section 910.1 so restrictively as to permit restitution only for individual

victims.   See Bonstetter, 637 N.W.2d at 165–67 (affirming restitution

order to the extent that it ordered repayment of damages to defendant’s

employer for lost profits); State v. Schares, 548 N.W.2d 894, 896 (Iowa

1996) (finding that the Archdiocese of Dubuque was not an “insurer”

within the meaning Iowa Code section 910.1 and therefore upholding

restitution order); State v. Hennenfrent, 490 N.W.2d 299, 300 (Iowa 1992)

(finding that a bank was not an “insurer” for purposes of Iowa Code

section 910.1 and therefore upholding restitution order); Stessman, 460

N.W.2d at 464 (upholding an order requiring a criminal defendant to pay

restitution to vehicle manufacturer).    Most important, we previously

upheld a restitution order requiring a criminal defendant to repay the
University of Iowa, a state institution, for the cost of an audit resulting

from the defendant’s criminal activity. See State v. Taylor, 506 N.W.2d
                                          12

767, 769 (Iowa 1993) (affirming district court’s restitution order that

required defendant to repay the cost of an audit); cf. Iowa Supreme Ct.

Att’y Disciplinary Bd. v. Fields, 790 N.W.2d 791, 794 (Iowa 2010) (“He

was also ordered to pay civil penalties and to make full restitution of

taxes, penalties, and interest to the State of Iowa for the tax liability

incurred . . . .”). Ordering Hagen to pay restitution to the State is also

consistent with both the plain meaning of the restitution statute and the

purposes      of    restitution:   to   compensate   victims   and   rehabilitate

defendants. See Bonstetter, 637 N.W.2d at 166; Teggatz, 610 N.W.2d at
529; State v. Kluesner, 389 N.W.2d 370, 372–73 (Iowa 1986).

      Hagen’s argument that the State cannot be a victim because it is

also a party must fail. The State will inevitably be a party to a criminal

prosecution, whether the victim of the crime is a state agency or an

individual.        See Iowa Code § 801.4 (defining “prosecution” as “the

commencement . . . of a criminal proceeding . . . and pursuit of that

proceeding to final judgment on behalf of the state” (emphasis added)).

Hagen’s interpretation of “victim” would deprive state agencies, like the

department, of the entitlement to restitution granted to all other crime

victims.   See id. § 910.2(1) (requiring court to order restitution to the

victims of the offender’s criminal activities); id. § 915.100(1) (“Victims . . .

have the right to recover pecuniary damages . . . .”). Each time the State

effectively performed its prosecutorial function and convicted a criminal

defendant, the State would forsake restitution. We cannot conclude that

the legislature intended such an absurd result. See Rivera v. Woodward

Res. Ctr., 830 N.W.2d 724, 733 (Iowa 2013) (explaining that we seek to

avoid absurd results when interpreting statutes).
      C. Penalties. The State contends that by failing to order payment

of the fraud penalty and the 2210 penalty as part of its restitution order,
                                     13

the district court failed to apply the clear language of the restitution

statute. Hagen, for his part, offers no direct response to this point.

         Restitution is “a creature of statute.” State v. Akers, 435 N.W.2d

332, 335 (Iowa 1989); see Earnest, 508 N.W.2d at 633 (stating that

restitution is “purely” statutory). “The district court is confined to the

statute in determining what damages to include in the restitution order.”

Bonstetter, 637 N.W.2d at 166.      When ordering criminal restitution, a

court applies Iowa Code chapter 910. See Jenkins, 788 N.W.2d at 643

(“Iowa Code chapter 910 generally provides the framework for imposition
of the criminal sanction of restitution.”). Restitution is mandatory “[i]n

all criminal cases in which there is a plea of guilty, verdict of guilty, or

special verdict upon which a judgment of conviction is rendered.” Iowa

Code § 910.2; see also State v. Jackson, 601 N.W.2d 354, 356 (Iowa

1999) (finding that restitution must be ordered by sentencing judge for

correctional fees certified by county sheriff); State v. Watts, 587 N.W.2d

750, 751 (Iowa 1998) (noting that restitution is mandatory when a

defendant pleads guilty); Kluesner, 389 N.W.2d at 373 (requiring that

sentencing court order restitution where defendant pled guilty and was

granted a deferred judgment).

         “ ‘Restitution’ means payment of pecuniary damages to a victim in

an amount and in the manner provided by the offender’s plan of

restitution.”   Iowa Code § 910.1(4).     However, there is also a second

component of restitution.       In addition to defining restitution to be

pecuniary damages to a victim, the restitution statute provides,

“ ‘Restitution’ also includes fines, penalties, and surcharges . . . .”   Id.

§ 910.1(4). No doubt penalties are to be ordered as part of a restitution
order.     Aside from the definitional provision in chapter 910, though,

other provisions suggest the term “penalties” in the restitution chapter
                                     14

does not embrace the civil tax penalties sought here by the State. Iowa

Code section 910.2 directs to whom each component of a restitution

order should be paid: “[T]he sentencing court shall order that restitution

be made by each offender to the victims of the offender’s criminal

activities, [and] to the clerk of court for fines, penalties, [and] surcharges

. . . .”   Id. § 910.2.   Thus, a victim receives the pecuniary damages

component of a restitution order, but the clerk of court receives

penalties.   See id. (directing further that “victims shall be paid in full

before fines, penalties, and surcharges . . . are paid”). A plain reading of
these two provisions indicates that the term “penalties” used in the

restitution statute does not include civil penalties for late taxes, but

rather refers to penalties payable to the clerk of court as criminal

penalties.

       If the State is to receive the civil tax penalties in this case, then

those penalties must fall within a different statutory term, and we believe

they do. As noted, “pecuniary damages” are “all damages . . . a victim

could recover . . . in a civil action arising out of the same facts or event,

except punitive damages and damages for pain, suffering, mental

anguish, and loss of consortium.” Id. § 910.1(3). This definition “clearly

indicate[s] a legislative intent that restitution to a victim depend[s] on

what the victim could obtain in a civil action against the defendant.”

State v. Paxton, 674 N.W.2d 106, 108–09 (Iowa 2004) (holding that a

restitution amount should be reduced dollar-for-dollar for payments

previously made to a victim by a defendant’s employer).

       The tax statutes and rules promulgated under those statutes

clearly impose penalties on individuals who do not file or pay taxes. The
civil fraud penalty, imposed under Iowa Code section 421.27(4),

mandates a seventy-five percent penalty where an individual willfully
                                    15

fails to file his or her return with intent to evade tax.      Iowa Code

§ 421.27(4).   Iowa Code section 422.16(11), under which the 2210

penalty is imposed, requires imposition of an additional amount to the

tax liability of an individual who fails to make quarterly estimated tax

payments. Id. § 422.16(11). Department rule 49.6, which is “intended to

implement Iowa Code section 422.16,” provides that “[t]he civil penalty

. . . for underpayment of federal estimated tax also applies to persons

required to make payments of estimated tax under provisions of the Iowa

Code.” Iowa Admin. Code r. 701—49.6. The department would recover
the civil tax penalties from Hagen if it sought to recover them in a civil

action.   See Iowa Code § 422.26(8) (directing the attorney general to

“bring an action at law or in equity, as the facts may justify . . . to

enforce payment of any taxes and penalties”); cf. Paxton, 674 N.W.2d at

109 (analyzing the “victim’s potential civil recovery” to determine whether

a reduction in restitution was appropriate); Bonstetter, 637 N.W.2d at

169 (examining what a victim could recover in a civil conversion case);

Taylor, 506 N.W.2d at 769 (concluding that the cost of an audit would be

a proper element of recovery in a civil conversion case).

      Civil tax penalties are not among the specific exclusions from the

definition of pecuniary damages.      The only possible exception which

could arguably prevent the collection of these tax penalties is the

“punitive damages” exception.      See Iowa Code § 910.1(3) (excluding

punitive damages from the definition of pecuniary damages).       But the

purposes of punitive damages and civil tax penalties differ, suggesting

that the civil penalties do not fall within this statutory term. Punitive

damages are awarded to punish defendants and to deter the defendant
and others from repeating the same conduct. See, e.g., In re the Estate of

Vajgrt, 801 N.W.2d 570, 575 (Iowa 2011) (explaining the purposes of
                                      16

punitive damages); Hamilton v. Mercantile Bank of Cedar Rapids, 621

N.W.2d 401, 407 (Iowa 2001) (same). By contrast, the civil tax penalties

to which the department is statutorily entitled serve a different,

nonpunitive purpose.       In Clark, we explained that “[t]he underlying

purpose of the [seventy-five percent] tax penalty is to reimburse the

government’s expenses for auditing the returns and the actual loss in

revenue resulting from the taxpayer’s fraud.” Clark, 644 N.W.2d at 318.

At the restitution hearing, the department auditor explained the process

by which she reconstructed Hagen’s income and determined the amount
of taxes that he should have paid. The process required the expense of

significant amounts of time and effort, and the civil tax penalties

compensate the State, the victim of Hagen’s criminality, for that time and

effort. Accordingly, the civil tax penalties sought by the State in this case

are properly awarded as an element of pecuniary damages in the

restitution order. The district court erred in not including the requested

civil tax penalties as part of its restitution order.

      D. Interest. The State also contends the district court erred by

failing to order Hagen to pay interest on his unpaid taxes.        Although

Hagen disputes the State’s contention, there is no controversy among the

State, Hagen, or the district court about the major cases and statutes

that inform the outcome of the dispute.         The district court concluded

that, based on our holding in Akers, it could not impose postjudgment

interest on restitution. The district court did not address the issue of

prejudgment interest.

      In Akers, the defendant pled guilty to second-degree theft after

stealing and damaging a pickup truck. Akers, 435 N.W.2d at 333. At
sentencing, the district court ordered the defendant to pay restitution of

$3436 plus ten percent annual interest.            Id.   Akers appealed the
                                          17

imposition of interest on the restitution order. Id. After concluding that

interest was not a component of restitution under Iowa Code chapter

910, we considered “whether restitution orders can be considered

‘judgments’ or ‘decrees’ ” within Iowa Code section 535.3.               Id. (quoting

Iowa Code § 535.3 (1987)).           At the time, Iowa Code section 535.3

provided that “ ‘[i]nterest shall be allowed on all money due on judgments

and decrees of courts at the rate of ten percent per year . . . . The interest

shall accrue from the date of the commencement of the action.’ ”                    Id.

(quoting Iowa Code § 535.3 (1987)).
       A specific prior holding, the language of Iowa Code section 535.3,

and rules of law factored into our holding in Akers.                 We began our

analysis of the issue in Akers by scrutinizing our holding in State v.

Haines, 360 N.W.2d 791 (Iowa 1985).             Akers, 435 N.W.2d at 334.           In

Haines, a criminal defendant argued that the provision in our restitution

statute permitting the state to recover as part of a restitution order the

fees of court-appointed counsel violated the Equal Protection Clause of

the Fourteenth Amendment.            Haines, 360 N.W.2d at 792–93.            Haines

relied on a United States Supreme Court case invalidating a Kansas

recoupment statute that treated recoupment as a “ ‘judgment.’ ” Id. at

794–95 (quoting James v. Strange, 407 U.S. 128, 135, 92 S. Ct. 2027,

2031, 32 L. Ed. 2d 600, 607 (1972)). The Kansas statute did not give the

criminal defendant any of the protections normally offered to civil

judgment debtors in Kansas. Id. at 795. Citing the lack of protections,

the United States Supreme Court struck down the Kansas statute

because the Court found the statute punitive and discriminatory.6 Id.

(citing James, 407 U.S. at 142, 92 S. Ct. at 2035, 32 L. Ed. 2d at 611).

       6Notably, following James, the United States Supreme Court upheld against an
equal protection challenge an Oregon recoupment statute that, unlike the statute at
issue in James, preserved for criminal offenders all the rights accorded civil judgment
                                          18

       We held in Haines that our restitution statute did not violate the

equal protection rights of criminal defendants because Iowa did not treat

restitution as a judgment. Id. Iowa’s restitution statute, moreover, gave

criminal defendants certain protections not available to civil judgment

debtors, such as allowing the defendant to perform community service

instead of submitting cash recoupment and considering the defendant’s

ability to pay. Id. Based on our examination of Haines, we explained in

Akers that the legislature “did not intend restitution orders to be treated

like civil judgments.” Akers, 435 N.W.2d at 335.
       We also considered an implication of the specific language of Iowa

Code section 535.3 and rules of law. We noted that “section 535.3 refers

to interest accruing from ‘the date of the commencement of the action.’ ”

Id. (quoting Iowa Code § 535.3 (1987)). That specific language seemed to

put the “judgments and decrees” used by section 535.3 “in the civil

context, implicitly excluding criminal restitution orders.” Id.

       We also relied on rules of law to conclude that “interest on

restitution    amounts       is   not    proper     without     explicit    statutory

authorization.” Id. We explained that at common law, judgments did not

bear interest, meaning that the right to interest on judgments is

statutory. Id. Because the statutory right to interest is in derogation of

the common law, we found that “statutes providing for interest on

judgments must be strictly construed.” Id. With these considerations in

mind, we concluded in Akers that permitting interest on restitution

amounts “would doubly violate the rule of strict statutory construction to


______________________________________
debtors and additional protections. See Fuller v. Oregon, 417 U.S. 40, 49–50, 94 S. Ct.
2116, 2122–23, 40 L. Ed. 2d 642, 651–52 (1974) (concluding Oregon’s statute was “a
far cry from the kind of invidious discrimination that the Equal Protection Clause
condemns”).
                                     19

infer, first, that restitution is a ‘judgment’ at all under section 535.3 and,

second, that it is the type of judgment to which this section applies.” Id.

      Later, we considered whether a court could impose prejudgment

interest as part of a restitution order, albeit under a different statute

from the one at issue in Akers. In State ex rel. Miller v. Santa Rosa Sales

& Marketing Inc., a case brought under Iowa’s consumer fraud statute,

we declined to infer that a restitution order was a judgment or decree

under Iowa Code section 535.3, holding “that the trial court’s award of

prejudgment interest on the restitution award was improper.”             Santa
Rosa, 475 N.W.2d 210, 220 (Iowa 1991).

      In 1992, the legislature amended Iowa Code chapter 910 to include

a new section.    That new section, which comprises two subsections,

provides:

              1. An order requiring an offender to pay restitution
      constitutes a judgment and lien against all property of a
      liable defendant for the amount the defendant is obligated to
      pay under the order and may be recorded in any office for
      the filing of liens against real or personal property.

             2. A judgment of restitution may be enforced by the
      state, a victim entitled under the order to receive restitution,
      a deceased victim’s estate, or any other beneficiary of the
      judgment in the same manner as a civil judgment.

1992 Iowa Acts ch. 1242, § 37 (codified at Iowa Code § 910.7A (1993)).

      The State’s contention that interest should be imposed on a

restitution order revolves around this 1992 amendment.          According to

the State, the legislature by the addition of Iowa Code section 910.7A to

chapter 910 made clear its intention to alter the results in Akers and

Santa Rosa.    The State argues that section 910.7A, which pronounces

that “[a]n order requiring an offender to pay restitution constitutes a
judgment,” interlocks with Iowa Code section 535.3, which, as noted

above, declares that “[i]nterest shall be allowed on all money due on
                                     20

judgments and decrees of courts at a rate calculated according to section

668.13.”     Iowa Code § 910.7A(1) (first quote); id. § 535.3(1) (second

quote).     A restitution order is a judgment, the State maintains, and

judgments accrue interest.

         Hagen counters that the amendment, by itself, is not sufficiently

clear to permit us to infer that the legislature intended for courts to

impose interest on restitution orders.     If the legislature had intended

interest to be imposed on restitution orders, Hagen argues, then the

legislature could have provided express direction as to when that interest
begins to accrue. Accordingly, Hagen contends that the legislature did

not intend to alter the result in Akers.

         In both Akers and Santa Rosa, we resisted inferring that

restitution was a judgment. Akers, 435 N.W.2d at 335; Santa Rosa, 475

N.W.2d at 220.      The unambiguous 1992 amendment, codified in Iowa

Code section 910.7A, obviates any need to make an inference and allays

the concerns we had in those cases about permitting courts to order

interest without explicit statutory authorization.       Restitution is a

judgment and is enforceable “in the same manner as a civil judgment.”

Id. § 910.7A(2). The State is correct that under Iowa Code section 535.3

“[i]nterest shall be allowed on all money due on judgments.” Because

Iowa Code section 910.7A is unambiguous, we need not delve more

deeply to determine whether the legislature intended by the adoption of

the section to alter or legislatively overrule Akers and Santa Rosa. See

Kamber, 737 N.W.2d at 298 (“ ‘When a statute’s language is clear, we

look no further for meaning than its express terms.’ ” (quoting State v.

Beach, 630 N.W.2d 598, 600 (Iowa 2001))). The express terms of section
910.7A require a different result than the outcomes reached in those

cases.
                                      21

         In light of our conclusion, two questions remain.   First, there is

still the question whether the State is entitled to prejudgment interest, or

whether the State is limited to interest from the date of the restitution

order.     Second, we must decide at what rate the restitution amount

draws interest. Hagen observes that Iowa Code section 910.7A advances

no guidance as to when the interest should begin to accrue or what the

interest rate should be.

         In Akers, we cited three statutes as potential sources for an award

of prejudgment interest, none of which contained an “explicit provision
for the imposition of interest on restitution amounts.”         Akers, 435

N.W.2d at 333–34.         After examining the statutes, we reversed the

sentencing court’s award of interest as part of a restitution order,

concluding that interest “is simply not one of the components of

“ ‘restitution’ under the statutory definition.” Id. at 334. We viewed the

enumeration of specific components in the definition of restitution as

indicative of a legislative intent to exclude interest from restitution

orders.      Id.   The search for an explicit reference to “interest” or

“prejudgment interest” in the definition of restitution yielded then, as it

yields today, no success. We failed though to analyze in Akers a term

that was then, and is now, explicitly included in the definition of

restitution, “pecuniary damages.”      See Iowa Code § 910.1(3).     Under

chapter 910, “pecuniary damages” are “all damages . . . which a victim

could recover against the offender in a civil action arising out of the same

facts or event.” Id. As we explained with respect to the civil tax penalties

issue, the definition of pecuniary damages indicates a legislative intent

that restitution should turn on the damages a victim could recover in a
civil action against the criminal defendant. See Paxton, 674 N.W.2d at
                                      22

108   (describing   legislative   intent   behind   definition   of   pecuniary

damages).

      We examine the State’s potential civil recovery to determine

whether the inclusion of prejudgment interest is appropriate. See id. at

109 (analyzing the “victim’s potential civil recovery” to determine whether

a reduction in restitution was appropriate); Bonstetter, 637 N.W.2d at

169–70 (concluding that the cost of an audit paid by a victim was

recoverable as part of a restitution order but denying it because the

prosecutor did not present sufficient evidence of the audit’s cost); Taylor,
506 N.W.2d at 768–69 (concluding that the cost of an audit was properly

included in a restitution order); cf. People v. Law, 591 N.W.2d 20, 24–25

(Mich. 1999) (concluding that interest was an element of restitution on

the basis of a statute that directed courts to consider the amount of loss

sustained by victims); State v. Brewer, 989 P.2d 407, 412 (Mont. 1999)

(reviewing statute that provided for restitution for victims who had

sustained pecuniary loss to determine whether a victim would recover

interest in a civil action). The department would recover the interest to

which it is statutorily entitled if it sought to enforce Hagen’s tax

obligations under its civil enforcement authority. See Ashland Oil, Inc. v.

Iowa Dep’t of Revenue & Fin., 452 N.W.2d 162, 164 (Iowa 1990)

(concluding that “interest is allowed upon the tax deficiency and that the

collection of interest upon the total tax will encourage taxpayers to report

and pay the correct tax”); cf. Iowa Code § 422.26(8) (directing the

attorney general, if justified by the facts, to bring an action to recover

taxes).

      In this case, there is a clear statutory source for the award of
prejudgment interest to the State. The department is entitled to interest

“at the rate in effect under section 421.7 for each month counting each
                                      23

fraction of a month as an entire month, computed from the date the

return was required to be filed.” Iowa Code § 422.25(2). According to the

exhibit prepared by the department auditor, and offered at the restitution

hearing, interest on Hagen’s unpaid taxes for the prior year began to

accrue in May of the following year (i.e., interest began to accrue on May

1, 2007 for Hagen’s 2006 unpaid taxes). See id. § 422.21 (“Returns . . .

shall be filed with the department on or before the last day of the fourth

month after the expiration of the tax year.”).      Consistent with this

statutory scheme, the statutory interest in this case continued to accrue
at varying rates under section 421.7 on the balance of each year of

Hagen’s unpaid taxes until June 30, 2012. The legislature has enacted

interest statutes meant to compensate the State for the loss of revenue

that should have been in its possession, and we view the restitution

chapter as advancing that goal.       See Ashland Oil, 452 N.W.2d at 164

(“The collection of interest allows recovery for the use of the money which

should have been paid for taxes.”).

      Moreover, the consonance between the purposes of restitution and

the purposes of prejudgment interest convince us that the inclusion of

prejudgment interest in the restitution order is appropriate here. See,

e.g., United States v. Patty, 992 F.2d 1045, 1050 (10th Cir. 1993)

(comparing the purpose of restitution under the Federal Victim Witness

Protection Act to the purpose of prejudgment interest and holding that

prejudgment interest was properly included in a restitution order); United

States v. Smith, 944 F.2d 618, 626 (9th Cir. 1991) (“Foregone interest is

one aspect of the victim’s actual loss, and thus may be part of the

victim’s compensation.”); United States v. Rochester, 898 F.2d 971, 983
(5th Cir. 1990) (concluding that the purpose of restitution was to make

victims whole and therefore upholding award of prejudgment interest).
                                           24

As restitution compensates victims of criminal activities, Teggatz, 610

N.W.2d at 529, awarding interest compensates them for the delay of not

receiving money when due. See 47 C.J.S. Interest & Usury § 65, at 75

(2005) (“The purpose of a statute providing for interest on a money

judgment in a civil action is to compensate the prevailing party for any

delay in the payment of money damages.”). Prejudgment interest also is

a form of compensation, the “essential rationale” for which “is to ensure

that the injured party is fully compensated for its losses.” Id. § 106, at

127; see also Ashland Oil, 452 N.W.2d at 164 (reasoning that requiring
taxpayers to pay interest on unpaid taxes compensates the State for not

having money that should have been in its possession). Therefore, an

order to pay prejudgment interest is not punitive, “but rather it reflects

the lost value of the use of the money awarded.”                    In re Marriage of

Baculis, 430 N.W.2d 399, 401–05 (Iowa 1988) (stating the purposes of

prejudgment interest and holding that prejudgment interest should not

be awarded in all dissolution actions).

       There is no reason to require the department, after Hagen pled

guilty to four counts of willfully failing to file his taxes, to institute

another proceeding to finally collect interest to which it is statutorily

entitled.7    See Bonstetter, 637 N.W.2d at 165 (“Since restitution is a

penal sanction separate from civil remedies, it makes it possible to avoid



       7The    department could follow an alternative avenue in seeking to recover
damages. See Iowa Code § 910.8 (“This chapter and proceedings under this chapter do
not limit or impair the rights of victims to sue and recover damages from the offender in
a civil action.”); id. § 915.100(2)(i) (“The right to victim restitution for the pecuniary
damages incurred by a victim as the result of a crime does not limit or impair the right
of the victim to sue and recover damages from the offender in a civil action.”); Teggatz,
610 N.W.2d at 532 (holding that a restitution order in a criminal case did not preclude
a victim from relitigating the issue of damages in a later civil case). We do not interpret
the addition of section 910.7A to the restitution chapter as intended to limit or impair
the rights of victims to pursue civil claims against criminal defendants.
                                     25

the necessity of a separate civil action and ensure the efficient use of

time and resources in the sentencing process.”). “ ‘The victim deserves to

be fully compensated for the injury by the actor who caused [the

damages].’ ” Id. (quoting State v. Ihde, 532 N.W.2d 827, 829 (Iowa Ct.

App. 1995)); see also Iowa Code § 915.100(1) (granting victims the right

to recover pecuniary damages); Dorris v. State, 656 P.2d 578, 584 (Alaska

Ct. App. 1982) (concluding that an award of interest on a restitution

order was proper because the purpose of restitution is to make victims

whole); cf. Roberts v. People, 130 P.3d 1005, 1010 (Colo. 2006) (holding
that sentencing courts must order prejudgment interest to fully

compensate crime victims). In order to be fully compensated, the State is

entitled to receive prejudgment interest as provided by statute.

      Finally, we must determine the rate of the postjudgment interest

on the restitution order. As Iowa Code sections 422.25(2) and 421.27 are

specific to tax liability, and section 535.3 is general to judgments that

have no contractual or statutory rate, the tax statutes prevail and thus

govern the postjudgment interest rate. See Iowa Code § 4.7 (directing

courts to interpret specific statute as an exception to a conflicting general

statute); Burton v. Univ. of Iowa Hosps. & Clinics, 566 N.W.2d 182, 189

(Iowa 1997) (explaining that a specific statute prevails as an exception to

a general statute when the two irreconcilably conflict). Accordingly, the

postjudgment interest rate is the same as the prejudgment interest rate.

      We conclude that the district court erred by not including in the

restitution order, prejudgment and postjudgment interest at the

statutory rate under Iowa Code section 421.7.           However, we must

remand the case to the district court for a determination of the
appropriate amount of interest to be imposed in the restitution order.
                                    26

      IV. Disposition.

      We reverse the district court’s denial of penalties and interest as

part of the restitution order. We remand the case to the district court for

purposes of including the penalties in the restitution order and to

determine the amount of prejudgment interest and to provide for

postjudgment interest consistent with this opinion.

      REVERSED AND REMANDED WITH INSTRUCTIONS.
