In any court or audit proceedings, the IRS must first come forward with evidence showing that it is appropriate to apply some penalty against a taxpayer before the actual court can move forward with administering the penalty. This does not mean that IRS needs to show the court any evidence involving reasonable cause or substantial authority though. It just means that initially, the IRS needs to show the court that it is appropriate given the evidence they have to apply a penalty to the taxpayer.
Appealing IRS Penalty
In the event the taxpayer wishes to appeal the penalty that the IRS is trying to impose on them, they need to do so by themselves and not wait for the IRS to do so. It is the taxpayer responsibility to raise concerns over a penalty they find unfair and not the IRS who is actually imposing the penalty. The IRS is not going to stop imposing a penalty unless the taxpayer brings up evidence to the contrary.