This is also something where how you interact with the IRS really really depends on your initial interactions.

If the IRS comes to you and says "your taxes are wrong you owe X amount" and you immediately turn around and prepare to fight them then they are going to be merciless with you.

But if they come to you and you turn around and show the auditor your methodology and what you thought you were supposed to be doing, etc and focus on fixing the issue and settling your debt then they are going to hook you up with IRS staff dedicated to helping fix this kind of stuff.

And most importantly they'll connect you with someone who can set up a payment plan out over whatever period of time to pay back what you owe without killing your business or taking your assets.

But again if you get audited and immediately become adversarial then they'll assume you were doing it intentionally and will take anything not bolted down.

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The rationale is basically that the IRS staff are mostly there to help you get your taxes in order and ensure that those taxes are paid but as soon as it starts to look like you are intentionally avoiding paying your taxes you get kicked over to the enforcement divisions and eventually the criminal divisions.

So good faith is absolutely something the IRS will honor but that stops the moment it looks like you are trying to hide stuff from them.