While it is true that the IRS cannot one day put a lock on your residence and sell your house, they can take action to do just that. If a Revenue Officer is convinced that it is in the best interest of the government, he or she will request the Justice Department file a lawsuit in Federal District Court.
If the DOJ accepts the case, they will seek to have a Federal Judge order that the personal residence be seized and sold at auction. At the same time, they will get a judgment to extend the Statute of Limitations an additional 20 years so that the Government can continue to collect the outstanding debt.
The good news is that this only happens in a very few cases each year and after the IRS has exhausted all methods to collect the money. We most often see it when the 10 year Statute of Limitations is coming close, the tax debt is significant, and there is considerable equity in the property.