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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15302
Experience:  15years with H & R Block. Divisional leader, Instructor
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I know the IRS can levy self-employment wages to satisfy a

Customer Question

I know the IRS can levy self-employment wages to satisfy a tax debt. If they decided to do that, would they send an official warning first? The last letter I received says my account has been marked for "collection activity". How threatening is this actually?
(quick backstory - I owe money for 2015 and planned on trying for a streamlined installment agreement, and then being smarter for next year so I don't owe for 2016, but come to find out I still owe a sizeable amount from almost 10 years ago. So they won't give me the streamlined agreement, because the old amount is about hit the deadline in September after which they can no longer collect it. They want me to pay a monthly amount I cannot afford right now because I am about to hit my slowest season as an independent contractor. So basically I'm trying to figure out what will happen if I stall a bit.)
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.


The letter you received is the notice, the collection action could include the levy on the non-employment payments.

The IRS generally has ten years to collect taxes once it has been assessed. The term “assessment” simply means the IRS has determined that a tax is due.

The IRS can levy both income and property including wages, payments from customers, retirement income, social security payments, state and federal tax refunds, savings and checking accounts, vehicles, real estate, or other valuables.

You generally have 30 days once the notice is sent to make payment, enter into an installment agreement, or attempt an offer-in-compromise.

A non-continuous levy is generally brought against someone who receives a form 1099-MISC, and is considered self-employed.

If the [payment they are asking for is too high you can request a lower payment amount by showing your income for the period and requesting a lower amount until the slow season is past.

If you just received the notice then act quickly to request they reconsider the payment.