In Frank’s case, when he factors his insolvency in that calculation, he said he would still owe nearly $25,000 in federal and state taxes. He needed the help of a tax lawyer to arrive at that reduced figure, which he said the I.R.S. may or may not accept.

Canceled debts are treated as income “to prevent people from using this as a loophole: lend someone money, they buy something of value, then cancel the debt and they don’t have to report that money as income,” explained Gerri Detweiler, a credit specialist with Credit.com. “But unfortunately very vulnerable borrowers are being swept up in this. They find themselves suffering from a variety of illnesses, unable to work, and having to deal with the I.R.S.”

The consequences of not paying are serious. The I.R.S. has the authority to garnish wages, bank accounts and other property, such as automobiles or retirement savings accounts. The agency can also garnish Social Security and pension payments, and can file a federal tax lien, which is attached to all property an individual may own, specialists said. The I.R.S. will also add penalties and interest to the bill.

If a taxpayer does not pay the amount owed, the I.R.S. will send a bill, which is the start of the automated collections process. If the borrower cannot work something out through that process and does not pay, the borrower will receive a final notice, which says the agency intends to collect what is owed and gives 30 days to comply, said Daniel J. Pilla, a tax litigation consultant and the author of “How to Eliminate Taxes on Debt Forgiveness,” (Winning Publications, 2013). The letter also notifies individuals of their right to appeal, he added, a process that stops the collections process.

A few other options are available for people who cannot afford to pay the bill. If the amount owed is less than $50,000, they can apply for a monthly payment plan online, according to the I.R.S., or request a plan by filing Form 9465 (people who owe more than $50,000 must file that form ). Some taxpayers may also qualify for an “offer in compromise,” where the I.R.S. agrees to settle the tax bill for less than the full amount.

Mr. Pilla said taxpayers could also try to prove that their monthly income was consumed by necessary living expenses, which may cause the I.R.S. to deem the debt “currently not collectible.” “That means they will press the hold button on the collection machine,” he added.