Apparently suffering financial hardship does not let you tap your IRA penalty-free, according to the Tax Court.
A taxpayer under age 59½ who lost her job and took payouts from her qualified dollars to assist in supporting her family.
Afterwards the IRS assessed the usual 10% penalty on early withdrawals, the taxpayer argued it shouldn’t apply because family finances were tight. While the Court was sympathetic to her plight, the law does not provide a waiver for financial hardship.
Elaine, TC Memo. 2017-3