Gary and Johnean Hansen - Page 14

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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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