Michael D. Cornwell and Hilary J. Iker - Page 10

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               Respondent declined an opportunity at the time for trial to            
          cross-examine petitioner or representatives of his employer about           
          the effect of the allegedly new policy, apparently because                  
          respondent maintains the position that nothing may be considered            
          outside of the administrative record made before the settlement             
          officer.  Petitioners did not attempt to introduce any evidence             
          concerning the actual effect of the allegedly new policy, which             
          had purportedly been in effect 10 months as of the time set for             
          trial in May 2007 and presumably would have been reflected in               
          petitioner’s 2006 or current compensation.  Thus we need not                
          decide whether to reconsider our position as to evidence first              
          presented at trial.  See Murphy v. Commissioner, supra at 311-              
          312; Robinette v. Commissioner, 123 T.C. 85, 94-101 (2004), revd.           
          439 F.3d 455 (8th Cir. 2006).                                               
               Because petitioners’ proposed OIC was not supported by                 
          evidence of petitioner’s actual current or future earning                   
          potential, we cannot conclude that the settlement officer’s                 
          rejection of their offer was arbitrary, capricious, or without              
          sound basis in fact or law.  The settlement officer’s computation           
          of what would be acceptable reflected actual earnings that have             
          not been shown to be unreliable as an indicator of future                   
          earnings, because the claim that the employer’s policy would                
          reduce petitioner’s earnings is merely speculation.  Petitioners            
          failed to show that the allegedly new overtime policy had an                

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