In 98' i coverted my IRA to a Roth IRA . The sum was 11,800.
I paid taxes on the 11,800 over the next three years. I took a 10,000 dispursement in Deecmber of 2000. Do i have to pay taxes again on the 10,000 or do i just pay a 10% penaty for early withdrawl.

If my memory serves me correctly, you could not pay the taxes over three years. If you elected the 4-year spread for a 1998 conversion, then the taxes must be paid over no less than 4 years, unless the taxes area accelerated as a result of a distrbution from the Roth IRA during that period or through death. I will double check on that and get back to you

However, to answer your question, no taxes will be owed on the $10,000. A 10% penalty may ebowed to the IRS is you are not under the age of 59 1/2 or entitled to any other exception, such as disability, first time home buyer, higher education expenses etc.