Level 14
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@Taxes Hispanos wrote:

His 401k was seized for restitution ... his lawyer advised him that somehow he wouldn’t have to pay the penalties but didn’t elaborate.

I wondering if the lawyer was thinking about when the IRS seizes/levies the fund?  If the IRS had done it, that would be exempt from the penalty.  But in this situation I can't think of any reason why the penalty would not apply.