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petitioner’s actual unpaid losses as nearly as they could be
ascertained. On brief, respondent acknowledges that
petitioner’s case reserves are “at least facially” in compliance
with the regulatory requirement that unpaid losses be calculated
“based on the facts in each case.” Sec. 1.832-4(b), Income Tax
Regs. Respondent contends, however, that petitioner has failed
to establish that the portion of its total unpaid loss reserves
represented by its adverse development reserve was necessary or
reasonable.
III. Expert Witnesses
The parties each called an expert witness to opine on the
reasonableness of petitioner's reserves. We evaluate expert
opinions in light of all the evidence in the record and may
accept or reject the expert testimony, in whole or in part,
according to our own judgment. See Helvering v. National
Grocery Co., 304 U.S. 282, 295 (1938); Estate of Mellinger v.
Commissioner, 112 T.C. 26, 39 (1999).
A. Roger M. Hayne
Petitioner’s expert, Roger M. Hayne (Hayne), is a
consulting actuary in the firm of Milliman & Robertson, Inc.20
He is a member of the American Academy of Actuaries. He holds a
20 Although Milliman & Robertson, Inc., is the actuarial
firm that provided the Witcraft opinion and report for
petitioner’s 1993 year, there is no indication in the record that
Roger M. Hayne (Hayne) was involved in the preparation of the
Witcraft opinion or report.
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