The recent prolonged downturn in the U.S. economy has placed millions at risk of financial insolvency. To avoid missing bills,many of the families that have experienced extended periods of lost income have turned to their IRAs or Keogh funds to fill the resulting financial gap.
The early redemption of qualified funds is taxed at the prevailing rate and the IRS adds a 10% penalty for the withdrawn amount.
In light of the tax breaks that have been extended to large profitable corporations, and in consideration of the purpose under which retirement (qualified) funds are accumulated' the removal of the early redemption penalty tax is fair.
In conclusion, there should be no tax penalty for redemption of qualified funds.