Don't Trust IRS Agent Advice on Penalties and Interest
Here is a case in point. In Estate of Telesmanich, TC Memo. 2011-181, the executor of an estate in Croatia called the IRS seeking advice concerning the U.S. income tax interest implications of long delays in the Croatian probate systems. The IRS Agent said essentially no big deal, send in the money with a written explanation of the cause of the delay, and interest would be abated (removed). The executor followed this advice. Well, the folks at the IRS responsible for tax assessment saw things a different way. The IRS tacked on the interest anyway and did not remove it.
The Tax Court ruled in the IRS' favor on the tax controversy because it found that the delay, overdue tax and resulting interest was not the result of the Agent's bad advice. So, moral of the story is that 2 things are certain: death and taxes, not IRS advice. Clearly, the IRS is sometimes wrong about its own procedures and programs. Call a qualified tax professional for help with penalty and resulting interset abatement.