• Paying back IRS taxes is not a valid reason for the early wwrhdtaial penalty. It should be, but it isn’t. It doesn’t matter if it is paid directly to the IRS or not.The IRS can levy the 401(k) under special circumstances, which means it may be the last thing that is taken. Specifically, they won’t just because you ask them to to avoid the penalty tax. If they do levy (seize) the account, no early wwrhdtaial penalty.