I recently lost my job. In the process of survival I had to cash in my 401k to afford housing for my wife and children. Now that I am in the process of preparing my 2012 taxes I discover a penalty due to the IRS that I cannot fully afford. I have only have a little over half of what I owe. The institution managing the 401k failed to inform us at the time that we may have qualified for a hardship withdrawal and avoided this but the option was never offered to us and cannot be applied for retroactively. Now I am afraid that if I cannot fully pay my taxes this year I may lose everything I have fought so hard to keep.