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Distributions of earnings from a Roth are only tax free under very specific circumstances. Early withdrawals have to satisfy very tight conditions to be tax-free (and the conditions are tighter if the money was due to a conversion). This taxpayer doesn't satisfy them.

But the OP said that the IRA was a rollover IRA. A "rollover" IRA is a transfer from a 401(k) or similar plan. Be sure not to confuse a rollover IRA with a "conversion" of a Traditional or Rollover IRA to a Roth IRA.
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