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demonstrated that they would suffer economic hardship and public
policy and equity reasons did not weigh in favor of accepting
their offer. Cochran’s determination to reject petitioners’
offer-in-compromise was not arbitrary, capricious, or without a
sound basis in fact or law, and it was not abusive or unfair to
petitioners. Cochran’s determination was based on a reasonable
application of the guidelines, which we decline to second-guess.
See Speltz v. Commissioner, 124 T.C. 165 (2005), affd. 454 F.3d
782 (8th Cir. 2006); Clayton v. Commissioner, T.C. Memo.
2006-188; Barnes v. Commissioner, T.C. Memo. 2006-150.
Petitioners make six arguments in advocating a contrary
result. First, petitioners argue that the Court lacks
jurisdiction to review the rejection of their offer-in-
compromise. Petitioners allege that Hoyt had a conflict of
interest that prevented him from extending the periods of
limitation for the partnerships in which petitioners were
partners. Petitioners conclude that any consents signed by Hoyt
to extend the periods of limitation were invalid, which in turn
means that the Court lacks jurisdiction because the applicable
periods of limitation have otherwise expired.
Petitioners’ challenge to this Court’s jurisdiction is
groundless, frivolous, and unavailing. It is well settled that
the expiration of the period of limitation is an affirmative
defense and not a factor of this Court’s jurisdiction. See Day
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