John and Michele McGovern - Page 9

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          received the funds and had no opportunity to avoid the 10-percent           
          premature distribution penalty under former section 72(m)(5).               
          Compare Larotonda v. Commissioner, supra, with Aronson v.                   
          Commissioner, 98 T.C. 283, 292-293 (1992) (sustaining the                   
          imposition of the 10-percent additional tax under former section            
          408(f)(1) when taxpayers had an opportunity to avoid such tax).             
               Petitioners also ask that we apply the doctrine of substance           
          over form to the $12,880.04 distribution from petitioner’s TSP to           
          Villanova University.  “The substance-over-form doctrine is                 
          applicable to instances where the ‘substance’ of a particular               
          transaction produces tax results inconsistent with the ‘form’               
          embodied in the underlying documentation, permitting a court to             
          recharacterize the transaction in accordance with its substance.”           
          Neonatology Associates, P.A. v. Commissioner, 299 F.3d 221, 230             
          n.12 (3d Cir. 2002), affg. 115 T.C. 43 (2000).  However, the                
          Supreme Court “has observed repeatedly that, while a taxpayer is            
          free to organize his affairs as he chooses, nevertheless, once              
          having done so, he must accept the tax consequences of his                  
          choice, whether contemplated or not, * * * and may not enjoy the            
          benefit of some other route he might have chosen to follow but              
          did not.”  Commissioner v. Natl. Alfalfa Dehydrating & Milling              
          Co., 417 U.S. 134, 149 (1974) (citations omitted).  Similarly,              
          the United States Court of Appeals for the Third Circuit has also           
          observed:  “The government has the right to claim that the form             
          of a transaction should not be utilized to postpone taxes that              
          are otherwise due.  The taxpayer does not have the like right to            

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