ira

[095489487]

What is the name of your state? NY
My husband owes IRS 20,000 (negotiated from 90,000 they wanted). He lost his job and wants to rollover his money from his ira and use 20,000 to pay off IRS and put remainder into new ira. Is this the best way to do this? I know about the penalties, taxes and such but we have no other options to get the 20,000. Is it possible to rollover the entire amount and then take a loan for the 20,000 against the ira? Any suggestions would be appreciated.

 

[abezon]

You cannot take a loan against an IRA.

Unless the IRS has a lien on the IRA, you will pay a 10% penalty for early withdrawal, and pay income taxes on the money. Ask the IRS agent if they would file a lien/levy against the IRA as part of the settlement, so that you can withdraw the money to pay them without also having to pay a 10% penalty. If they say no, you'll need to roll over the entire amount, then withdraw 25,000 (20% will be sent to the IRS directly to cover income taxes & penalties). 20% is probably not enough, so you will still owe money in April.

Don't forget to add enough to your withdrawal to cover any NY withholding requirements.