The answer is no—if it's done properly. You can move the funds by means of a trustee-to-trustee transfer to another IRA, or roll over the amount to your 401(k). You would need to check with your current employer or the 401(k) plan's administrator to determine if it will allow the rollover first, of course. This way, you will keep the amount in your retirement nest egg and defer paying income tax on the amount.
Withdrawals, Tax Brackets, and Penalties
If you withdraw the amount from the account and shut it down, it will be taxed as income based on your tax bracket. Consult a tax professional to determine your tax rate. Also, the Internal Revenue Service (IRS) imposes penalties for withdrawing your IRA if you're under the age of 59.5.
However, the above is assuming you have a traditional IRA. The rules are different if you have a Roth IRA. You can close your Roth account without negative consequences if your total account balance is less than the accumulated amounts you deposited as regular contributions.
For more information from the IRS on this matter, see "Recognizing Losses on Investments" in IRS Publication 590.
This question was answered by Denise Appleby. (Contact Denise)