conversation: User (hoggin88): "I have been researching this and can't find an answer that makes me confident. Any help is appreciated. In August 2014 I put $3,700 into a Vanguard Roth IRA account. It was in a savings account and I never invested it in any actual mutual funds. In March 2015 the account had pretty much no growth (obviously) and the account balance was $3,700.03. I then withdrew exactly $3,700 and the $.03 has been sitting there ever since (actually it is now $0.21, not that it matters).\n\nYesterday I got a bill from the IRS for about $1,300 saying that I have to pay taxes on that $3,700, plus the 10% early withdrawal penalty, and pay back an earned income tax credit of about $400 that we no longer qualify for. It is a legitimate letter from the IRS. I can either send payment or protest it and include proof of why I do not owe it. Am I correct in thinking I should not have to pay anything on this? If I understand correctly Roth's cannot be taxed upon withdrawal, and I shouldn't have to pay the 10% penalty because I only took out my contributions and had no earnings. Am I correct? And what do I do if so? Include account statements and an explanation?\n\nThank you so much for any help."
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