Western National Mutual Insurance Company v. Commissioner of Internal Revenue

BOWMAN, Circuit Judge.

The Commissioner of Internal Revenue (Commissioner) appeals the Tax Court’s determination that there was no deficiency in Western National Mutual Insurance Company’s income tax for 1987. We affirm.

I

The taxpayer, Western National Mutual Insurance Company (Western), is a property and casualty insurance company engaged in the business of writing a wide variety of insurance policies. Western, like other property and casualty insurance companies, maintains reserves to cover unpaid losses; that is, losses that have been reported but not yet paid, or losses that have been…