@PATAX  IRS didn't pay any penalties in this case but at least they refunded the ones they assessed because they screwed up when announcing  them. 

"When the Internal Revenue Service levied tax penalties against Mann Construction and its owners under one of its regulations, technically a Notice, the taxpayers replied that the IRS violated the Administrative Procedure Act. In a prior opinion, we held that the Notice violated the APA. The IRS voluntarily refunded the penalties to the plaintiffs and agreed not to apply the Notice to the taxpayers in the future. Even so, the district court on remand proceeded to invalidate the regulation nationwide. Because the dispute is moot, we vacate the district court's decision."

https://caselaw.findlaw.com/court/us-6th-circuit/115504980.html