Crime Committed - Early Withdrawal from IRA

[Eddie82]

What is the name of your state? California.

Hi,

I set up a $3,000 IRA in 2006 for tax benifits but the teller at the Bank had made a mistake in my SS number. When I went to check on my money a year later, the Bank told me to submit all kinds of documents to prove my identity.

Out of fear of loosing my money to someone and frustration, I withdrew the full amount with interest on 03/23/2007. Federal and State taxes were NOT withheld.

Now that the tax time is here, the thought of loosing 50% of my money to uncle sam is just eating me up. Can I do anything to reverse this??????

I am willing to put the money back in IRA if I need to or anything else for that matter to avoid the hefty penlty and taxes. Is there a fix?

Thank you

[FlyingRon]

You were acting stupidly. It's trivial to correct SSN's. The SSN mistake would not have put your money at risk.

The problem is what you shoul dhave done if you were concerned is transfer it to another IRA. Since you presumably transfered it to some non-IRA account that you have constructive use for, you are going to have to pay the penalty.

[tranquility]

There is nothing you can do. You will pay the taxes and the early withdrawal penalty taxes on the amount.