He's probably not nearly as SOL as he thinks. As others are already pointing out, he probably just needs to come at it as a "self employed individual". There is tax for this, but also many deductions. A few choice minutes with a tax professional would probably clear up most of his problems.
Unfortunately, those minutes would have been a bunch more helpful before he ended up with penalties for not filing, but again, a good tax professional can probably help him negotiate a more reasonable settlement.
I agree. He's not as SOL as he thinks, in general. I think where the SOLedness comes from is that he has a tax bill that he knows he can't pay right now. It's a scary place to be and probably feels like the end of the world. It's not (yes, speaking from experience).
It's unlikely that the IRS will do anything drastic in his case. He'll probably just go on a payment plan and figure out how to move forward with his website. They'll work with him.
By 'tax professional' do you mean a lawyer or an accountant? I remember hearing ads on the radio some years back for a tax lawyer claiming that it was better to see a lawyer than an accountant because the accountant can be forced to testify against you (but attorney-client privilege protects you if you get a tax lawyer).
Unfortunately, those minutes would have been a bunch more helpful before he ended up with penalties for not filing, but again, a good tax professional can probably help him negotiate a more reasonable settlement.