I had a somewhat similar experience last year. The IRS sent me a letter saying that they found I had mis-stated income from one of my freelance gigs. They said

I had a somewhat similar experience last year. The IRS sent me a letter saying that they found I had mis-stated income from one of my freelance gigs. They said their records show that I was paid $800,000 for the job but I only claimed $800. I now owe ~$450k in back taxes along with daily accrued interest and penalties, we have enclosed a envelope for you to mail a check, etc. I checked my records and I was indeed only paid $800 for the job. I checked with the company to make sure they didn't make an error when they filed their takes, nope, $800 the whole way. Within days I had IRS agents calling both mine and my wife phones, calling previous employers, showing up at my house looking to put me on a payment program. Our state and federal tax returns were held up and applied toward the "debt". I'm sure that if I had a bank account tied to my SSN that those would be locked out as well. It took 6 months and $3500 for a tax attorney to go back and forth with them over every single dollar on every 1099. They would literally go down the list and say "Thank you for bringing '$1099' into compliance, but we have found a discrepancy with '$1099 + 1', please submit a payment of $payment along with daily accrued interest and penalties".