I have a client who is asking me to do this: 

I received a 1099-R. I need you to state on a "Federal Supplemental Information Form, "This withdrawal from my IRA was due to financial hardship. It seems one of the sources I associated with for my past business over the years is being charged with fraud in all the IT vendor relations that were being applied. As I was the invoice administrator, I have been brought in for review as well and have to pay some very high attorney fees, have had to close my business, undergo family hardships, and look for new work."

I called and confirmed that the client is expecting this withdrawal to be exempt from ALL tax due to financial hardship and not just the 10% penalty.  Has anyone experienced this, have advice for me on this?  When speaking to the client, they told me that a lawyer instructed them to do this and they have done it once before.  This is the 1st return I've done for this client.