I have a friend that is cashing in her 401k (mostly from a previous job)to pay off debts and buy into a business she is currently working for.The total amount is about $125000. The IRS had a tax lein from 2008 for $4500 that she paid along with a $450 fee to print a release for the 401k money. The lein was on the full amount of the 401k and not just the $4500 of it that was due. After this was paid for and the 401k money was still not released she called into her Senator's office for help...