The IRS recently released Revenue Procedure (Rev. Proc.) 2023-10. The revenue procedure prescribes loss reserve discount factors for the 2022 accident year and provides discount factors for 2022 and prior accident years for use in discounting unpaid losses and salvage recoverable for the 2022 tax year.
Table 1 (parts A and B) provides 2022 accident year discount factors for short-tail lines, whereas Table 2 (parts A and B) provides corresponding discount factors for long-tail lines. Tables 1 and 2 provide valuable information for projecting tax reserves as accident year losses and salvage age.
Table 3 (part A and B) provides current and prior accident year discount factors for short-tail lines. Table 4 (part A and B) provides current and prior accident year discount factors for long-tail lines. The IRS has provided these tables so taxpayers and practitioners can easily calculate current-year tax reserves without having to refer to prior revenue procedures. Also, note the 2022 tax year discount factor for the Accident and Health line of business is 98.6826%.
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