Couple gets taxed for tapping IRA; how to pay?

http://www.latimes.com/business/la-fi-montalk-20130317,0,4903490.column

 Choices include cashing out a certificate of deposit, borrowing from a credit card or setting up a payment plan with the IRS.

 

Dear Liz: Help! We've just received devastating news from our accountant that we owe around $11,000 to the IRS and the state for 2012 taxes. The reason for the huge bill is that we cleaned out my husband's IRA to pay for our son's college expenses. My husband is almost 65 and working part time after being laid off, and I'm 61 with a full-time job. What is the best way to pay this bill? Here are the options I can think of: 1) Cash out my three-month emergency certificate of deposit of $12,000 that I've saved to cover expenses in case I get laid off. 2) Take money out of my IRA. 3) Use a credit card check that will be at zero percent for the first 12 months and then will slide to 8.9%. 4) Arrange a payment loan with the IRS. 5) Sell our house in which we have 70% equity. Which is best?
Answer: Let's take No. 2 off the table, shall we? If you learn nothing else from this experience, it should be that tapping retirement funds can trigger a big (and often unnecessary) tax bill.
Selling your house over an $11,000 bill is overkill, so let's eliminate that option as well.

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