If you are unable to pay the full balance, your next best option is to set up a payment plan with the IRS, as you indicated. More information about IRS payment plans are available here: IRS Payment Plans
Other options include an offer in compromise (OIC) or to request the IRS temporarily delay the collection process: Temporarily delay the collection process. Both have specific qualifications and are not available to all taxpayers. If you choose these options, the IRS will review the application and your account to determine if you are eligible.
If you take no action, the IRS will eventually start attempting to collect the balance due, which can include seizing future tax refunds, garnishing wages/bank accounts, levying personal assets, etc. This article explains the IRS collections process: IRS Topic no. 201, The collection process
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