I have been told by the IRS that I can claim dependents (exemptions) on my IRA withdrawals.
The 15% tax rate is still applied, but the earnings base would be reduced. Unfortunately, form 1040NR does not lend itself to a flat 15% rate (unless I am missing something). Any clues? PUB 519 is a quagmire, and hasn't helped.

If CDN means Canada, then, yes, you can claim your wife and children as dependents on the Form 1040NR. The reason being is that an IRA withdrawal is considered "deferred compensation", which allows you to be taxed under the U.S. normal progressive tax rates, instead of a flat 30%.

You may need to apply for ITINs for your wife and children by submitting Form W-7 with the tax return.

If you need professional help filing your return, email me at [email protected] or [email protected]. I am also a Certifying Acceptance Agent, which will help with the ITIN process.