If an early distribution has been ordered by the courts to pay back restitution, are there early distribution fees?

I went through the Federal Courts. I've spoken to my tax preparer, went to the local IRS office and no one has an answer for me.

Retirement Savings, Taxes
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July 2016

It appears that nobody else wants to answer this question so I'll take a shot. The IRS and Congress have laid out special circumstances where distributions before age 59 1/2 are completed with out any penalties or what I think you're calling distribution fees. Some of these have to do with hardship and others have to do with the first home purchase, but the most important ones are the ones related to section 72-T of the IRS code that provides three different methods were early distributions can avoid penalties. However, in each of these three cases it requires a monthly distribution of typically no less than five years and once started cannot stop until after age 59 1/2 or five years whichever comes last. Back to your basic question- then it appears that any withdrawal from qualified retirement plan prior to age 50 1/2 will be subject to early distribution fees or penalties of 10% of the amount withdrawn and the entire amount will be taxed as ordinary income in the year the withdraw. I also have no rulings or decisions to fall back on, but I believe my answer is somewhat logical and with a little bit of research, you can look at each of these areas of the law. If your own tax preparer is unable to provide you with an answer, I think I changed tax preparers. I hope this helps a little bit and good luck


NOTE:  The 72(t) Early Distribution Illustration helps you explore your options for taking IRA distributions before you reach 59½ without incurring the IRS 10% early distribution penalty. Internal Revenue Code (IRC) Section 72(t)(2)(A)(iv) defines these distributions as “Substantially Equal Periodic Payments”.