In the case of United States v. Liverpool & London & Globe Insurance Co., Ltd. et al., 1954, the U.S Supreme Court ruled on a dispute involving federal tax law and insurance companies' loss reserves. The Internal Revenue Code allowed deductions for "losses incurred," which included unpaid losses that were reported and claimed but not yet paid at year-end (known as case reserves), as well as estimated amounts to cover incidents that had occurred but hadn't been reported by year-end (IBNR reserves). The IRS disallowed IBNR reserve deductions, arguing they weren't "incurred" since they were estimates for unknown events. However, the court held in favor of the insurance companies, ruling that both types of loss reserves could be deducted under federal tax law because they represented actual liabilities even if their exact amount was uncertain or unreported at year end.

In the dissenting opinion for United States v. Liverpool & London & Globe Insurance Co., Ltd et al., Justice Robert H. Jackson argued that the majority's decision to allow a foreign corporation to be sued in any U.S jurisdiction where it does business was an overreach of judicial power and inconsistent with due process rights. He contended that this ruling would place an undue burden on international commerce by subjecting foreign corporations to lawsuits in potentially every state, regardless of their connection or lack thereof to the alleged wrongdoing. Furthermore, he expressed concern about potential retaliation from other countries against American businesses operating abroad as a result of this decision. In his view, such matters should be left up to Congress rather than decided by courts.