-18-
adjustment expenses for 1991 and $49,418,509 for 1992.
On March 13, 1996, respondent sent a notice of deficiency to
petitioner in which respondent determined that petitioner
overstated its discounted unpaid losses by $5,816,776 for 1991
and $3,904,930 for 1992, and that petitioner's discounted unpaid
losses should have been $39,833,473 ($45,650,249 - $5,816,776)
for 1991 and $39,696,803 ($49,418,509 - ($3,904,930 and
$5,816,776)) for 1992. Respondent amended its answer after trial
to assert that petitioner overstated its undiscounted unpaid
losses by $13,070,000 for 1991 and by $19,394,000 for 1992, and
that petitioner's undiscounted unpaid losses should have been
$43,765,000 for 1991 and $42,577,000 for 1992.16 Petitioner
bears the burden of proving that respondent's determination in
the notice of deficiency is erroneous, Welch v. Helvering, 290
U.S. 111, 115 (1933), and respondent bears the burden of proving
that petitioner's discounted unpaid losses should have been less
than the amounts determined in the notice of deficiency for 1991
and 1992. Rule 142(a). However, our holding is not affected by
who bears the burden of proof.
16 Respondent redetermined petitioner's discounted unpaid
losses in the notice of deficiency, whereas respondent's
adjustments in the amended answer were to petitioner's
undiscounted unpaid losses. The taxpayer is required to report
discounted unpaid losses on its income tax return. Secs.
832(b)(5)(A)(ii) and 846.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011