Assuming you are talking about penalties and interest for tax debt.
When taxes are owned and are not paid - the IRS will automatically assess penalties and late fees on the amount owed. Depending on an acceptable reason the IRS might consider to possibly waive the penalties and at least a portion of the problem might be solved. Generally acceptable reasons are a natural disaster, death or illness.
The interest generally may not be waived.
If taxpayers are unable to pay a tax debt in full - there are several options:-- an installment agreement - http://www.irs.gov/businesses/small/article/0,,id=108347,00.html-- offer in compromise (OIC) - http://www.irs.gov/businesses/small/article/0,,id=104593,00.html
An installment agreement would allow you to make a series of monthly payments over time. A one-time installment agreement fee of $105 will be charged when you enter into an installment agreement unless you choose to pay through a Direct Debit from your bank account, in which case the fee is $52.00. Taxpayers with income at or below 250% of the Department of Health and Human Services poverty guidelines can apply to pay a reduced user fee of $43.
If an installment agreement is not an option, you may be able to take advantage of an offer in compromise (OIC). Generally, an OIC should be viewed as a last resort after taxpayers have explored all other available payment options. The IRS resolves less than 1% of all balance due accounts through the OIC program.
An OIC is submitted on Form 656, Offer in Compromise. Form 656 is a complete information package also containing Forms 433-A and 433-B, Collection Information Statements, instructions, and a worksheet.
While professional help is not required - it is helpful in many situations.
You might need a local CPA or Enrolled Agent to represent you with the IRS
If the person is a low income taxpayer - he/she may apply for help to Taxpayer advocate service 1-877-777-4778 or TTY/TTD: 1-800-829-4059.
A list of Taxpayer Advocate Service offices can also be found in Publication 1546 - http://www.irs.gov/pub/irs-pdf/p1546.pdf
The taxpayer can also file Form 911, Request for Taxpayer Advocate Service Assistance, with the Taxpayer Advocate Service, or request that an IRS employee complete Form 911 on his/her behalf.
Let me know if you need any help.