If you cashed out a retirement account the distribution was reported to the IRS. Money you take from a retirement account is taxable income. Depending on the circumstances, that money may be subject to a 10% early withdrawal penalty and ordinary income tax as well. You should have entered a 1099R on your tax return for that for the tax year in which you received that money. It may have taken this long for the IRS to catch it, but now you need to sort it out with the IRS.
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