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at yearend 1986 than at yearend 1985, but had not changed its
reserve assumptions or methodology in computing that balance.
The Commissioner argued that all increases in reserves
constituted "reserve strengthening" and that the taxpayer's
increase therefore should have been excluded from the fresh
start. In rejecting the Commissioner's position, the Court cited
the following six factors:
(1) The statute is not ambiguous and uses a term of art
in a portion of the Internal Revenue Code which has
been specially designed for a particular industry and
generally contains industry jargon; (2) the legislative
history materials are internally contradictory in that
there are references to all increases to reserves and
explanations regarding artificial increases or a
specific type of increase; (3) the regulatory
definition of the term "reserve strengthening" does not
comport with insurance industry usage; (4) the
regulatory definition of the term "reserve
strengthening" does not harmonize with its
congressional use 2 years earlier in related and
parallel statutes involving life, rather than PC,
insurance companies; (5) the regulatory approach would
result in anomalous results; and (6) the traditional
industry definition of the term comports with the
concept that Congress was attempting to limit any
attempts by taxpayers to take advantage of the fresh-
start provisions by means of artificial increases to
reserves. * * * [Id. at 360-361.]
The Court placed particular emphasis on several of these
factors. It stated that subchapter L, which sets forth rules
governing the taxation of insurance companies, "is a highly
specialized portion of the Internal Revenue Code which is replete
with the unique nomenclature of the insurance industry." Id. at
342-343. The Court acknowledged that the statute did not provide
a definition of "reserve strengthening" but found that the term
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