It really depends on the amount, but as somebody else had pointed out, the IRS would put a lien on your house.
I'm assuming John Gustafson is probably old enough to collect Social Security, so that's the first thing they would do when collecting back taxes: Garnish a certain percentage of your federal retirement check and any wages you earn from a regular job.
Once it's paid off, they simply reinstate the full amount and remove the lien. I know this because my grandfather owed back taxes years and years ago and failed to pay them. As a result, they put a lien on his house so he couldn't sell it, then seized a sizable portion of his monthly retirement check.
Good thing his mortgage was paid off, otherwise, he would have been in a world of hurt.

Not always.
My father was in a similar situation where he sold some property and miscalculated the taxes he owed from the sale - he ended up owing something like $6000, with interest and penalties. The IRS agent was pretty nice about it and they worked out a monthly payment plan my dad could afford.

If they file liens, they can extend the SOL. At least when I worked in taxes at the state levels, and I assume the IRS has better resources. And yes, for that amount of money, especially an elderly person with no way to pay the taxes, if they have a viable collection source, I would expect they would take it.
~ j'adore faire l'amour ~

In this case, not only could they not sell his house, they could not even collect his back taxes.
There is a ten year statute of limitations for the IRS to collect any back taxes. The IRS agent specifically said this supposed oversight occurred 11 years ago, making those back taxes null and void.
Even if it were within the statute of limitations, I doubt they would repo his house and sell it, throwing a senior out in the street. They would find a way to put him on some kind of payment plan or collect from his estate after death.

Absolutely. They're a bunch of heartless bastards.