If you are in a Chapter 13 Bankruptcy making payments, can you withdraw from your 401 k plan to pay this off in full. What is the penalty for doing this as far as IRS is concerned?

You will pay full penalty to the IRS, the 10 percent and the tax at your tax level.
Also you seriously need to speak to your attorney about this prior to doing this. If you have the ability to pay more than the plan was asking for, then those non securer debtors may be able to claim a higher percentage than they are currently at.