Originally Posted by Idle

This gets rather complicated, but the short answers is that they estimate your tax, send you a bill, and then allow you to dispute the bill. Then the taxpayer is offered a chance to pay what they owe plus any surcharge, and in the end a settlement is worked out.

Seizing assets, which is the last step in the process, is very expensive for the IRS. Working something, anything, out is the cheapest way to settle these matters.