From someone who put the question directly to the IRS Grand Poohbahs at last week’s ABA Tax Section meeting in Washington DC:
In response to my direct question at one of the panels, I think it was from Ron Schultz, I was told that “currently” revenue agents did not have discretion to settle a de minimus case for less than the 20% penalty.
Translation. Let’s say you have an account with $100,000 in it. Earning the current 0.000001% interest that bank accounts do. You end up owing $1.00 of tax. This means your friendly Revenue Agent will settle your amnesty case for $1.00 of tax and $20,000 of penalties.