| Can the IRS waive the interest due from an Audit?
In my 17 years experience, the IRS has frequently waived penalties as a result of an adjustment from an audit! I have found that in most cases, the taxpayer can claim prior years compliance of tax filing and paying all the tax liabilities in a timely manner would usually result in the penalties being waived!
But, it is very rare, except in an adjustment that is considered "de minimis", (that is, not very significant), the IRS will waive both penalties and interest. But, in most cases that an audit adjustment resulted in interest charges. The IRS agent is correct in saying that the Interest is commuted by the computer software program. This amount is rarely waived.
So, in my experience, it would be best to pay the interest portion, as fighting it in most cases would not be productive! | 
