When you get a distribution from a 401k they will withhold 20% from the funds for federal tax. If you took a $4000 distribution, they withheld $800. That's not the end of your tax situation, though.

You need to report that $4000 distribution on your tax return as income and pay the income taxes you owe on the distribution, which can range from 0-35% depending on your tax bracket when it's combined with your other income for the year. You may also be paying a 10% tax penalty for early withdrawal if you are under age 59.5.

Simply because they withheld 20% doesn't mean you may not owe an additional amount when you file your taxes.

Have you had someone else, besides the IRS, look over and possibly fix those prior years? I won't say the IRS screwed up your taxes, but they certainly don't expend much effort finding the deductions or credits you might be eligible for.

The $800 that was withheld is only an estimate, just like the withholding from wages. When the income goes on your tax return, you might owe more, or possibly your tax is less. There may also be state taxes due on this distribution.