Can the IRS garnish my self-employment income?

Yes, the IRS can levy self-employment income, and it can be more aggressive than wage garnishment. For W-2 employees, the IRS must leave you a minimum exempt amount based on your filing status and dependents. For self-employed individuals, the IRS can levy 100% of accounts receivable and payments from clients. The IRS sends a Notice of Levy (Form 668-A) directly to your clients or customers, requiring them to send payments to the IRS instead of to you. This can be devastating for your business and client relationships. The IRS can also levy your business bank accounts, seize business assets, and garnish any 1099 payments. To protect yourself, you should respond to IRS notices before they reach the levy stage. Options include entering an installment agreement, applying for an Offer in Compromise, or requesting Currently Not Collectible status. A tax professional can often negotiate a levy release within days by demonstrating that the levy is creating an economic hardship or by proposing an alternative payment arrangement.