Can the IRS seize 401k for the payment of delinquent taxes

Yes, they can. The can take assets that are normally protected from creditors, such as IRA and 401(k) assets. See: IRS Collection Process (http://www.dcselfhelplaw.com/guide.asp?level=3&id=603)

As long as the funds remain within the plan, I don't believe that they IRS can take them. Further, I don't believe that the IRS can force a distribution. However, if the funds are distributed, then the IRS can take the funds.

See Felhaber, Larson Fenlon & Vogt - 401k vs. SEP – Which Plan is Better? (http://www.felhaber.com/ARTICLES/401kvsSEP.html)
See also https://www.financialengines.com/FeContent?&s=56c837deec3604&pact=irc&act=irgahm01