@IRonMaN   It was a trick question.  I was surprised you didn't catch it .  I guess your ACME advanced grammar certificate expired.

The answer is NO.

Question:   if someone closes a 401 k and transfers it to their savings do they still have to pay taxes on it

Someone: A taxpayer, a person.  SinguLAR.

Their savings: the savings account owned by a bunch of people.

Upon transfer, the taxpayer pays tax, unless rolled over in 60 days.  Form 1099-R kicks in.

After the transfer THEY (the bunch of people) no longer have to pay tax on it - assuming it refers to the 401(k) account.

So, the answer is NO.