401(k) distributions - Any averaging allowed?

[MAJ]

Client took 70k out of 401(k) to assist her son in need. He had to go into rehab and from what I gather it was largely medical related expenses in one form.
Due to the this large distribution she now owes 12k {no exclusions applied}.

is there anything to be done to average the income or exclude based on use?

She flat out doesn't have it and she's freaking out!! To make mattres worse, she was laid off and is making peanuts now.

I try to tell htem... Don't touch it - but do they listen..... Nooooooooo..

Thanks..
MAJ

[JohnH]

If she doesn't have the $, then she needs to get ready to set up an Installment Agreement if she can't borrow the money. Depending upon her circumstances, an OIC might be a possibility in the future, but for now she needs to deal with reality. Also, if she really can't pay it, then she might be able to get the account into uncollectible status. Having to pay $12K is a lot of money, but $250/month to get some breathing room until she can sort things out isn't a bad intermediate step.

[taxmom34]

if the 5-10 year averaging were used, i believe she had to take the whole amount of her 401K and pay the taxes this year, so it could be worse than what she is facing now. i would go with the installment application

[Y2KEA]

Is this an early distribution?
If so would a 5329 code 05 exception do any good?

[Burke]

if the 5-10 year averaging were used, i believe she had to take the whole amount of her 401K and pay the taxes this year, so it could be worse than what she is facing now. i would go with the installment application

There is no 5-10 year averaging any longer. 10-yr averaging is for full distribution of qualified pension plan for persons born prior to 1936.