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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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