So why are people who are non-willful being categorized as “willfully blind?”

Answering this question — it goes to the entire heart of what tax litigation is and IRS administrative practice. And it goes to my absolute frustration when people play attorney with the IRS, instead of actually advocating a position by doing the necessary ground work first. 
Enforcement authorities always like to have ill-defined and vague parameters in laws and regulations with penal sanctions as that gives them discretion and bargaining power......................

The IRS is not a person. It does not have a conscience. It does not stay up at night worrying if people like it. The IRS is simply a system where people follow orders.  In all reality, the IRS has no problem ruining you. And the naivety of otherwise smart, intelligent, hard-working people to understand this —  well, this — you even have that nightmare where you’re trying to yell to a loved-one so they can avoid impending harm, but you can’t make a sound? Well that’s what it seems like some days when people tell us they are going to try handling a problem themselves or with an under-powered representative.
Anyone who actually litigates a case can attest the number one job is to “create a record.” The number one goal is actually not to win at trial (although that is nice as well).  Because if you lose (which you really might), but you have “created a record” for an appeals court to review, you still have a chance to win (or at least increase your negotiation power). Fail to create the record, and if you lose at trial, you stand *pretty much* no chance at winning an appeal.
And you have to think of tax court and federal district court like this. They are typically, and sometimes completely, bound by whatever the administrative record is. If you make a habit of reading tax court opinions, you see time and time again a taxpayer or representative failed to adequate document an argument, didn’t show up for a hearing, didn’t propose a solution, didn’t know how to present an argument, or simply hoped and prayed the IRS would rule their way. That is, they failed to exhaust their administrative remedies. And time and time again they lose. 
The best way to win an administrate controversy with the IRS such as an Offshore Voluntary Disclosure, is to prepare as if you are going to trial. Prepare as if you are going to trial and the chances are that you won’t need to go to trial. 

There is actually no right to IRS appeals within OVDP, even when requesting transitional procedures. You only get appeal rights and the right to tax court if you opt-out. Within OVDP, the farthest you can take a disagreement is to the manager or Taxpayer Advocate Service (TAS). It remains to be seen (by us, at least) what level of authority or pull TAS may have in OVDP cases. We’ve only seen them help us in processing errors, but we have not yet had the need to call them in on an substantive issue for an active OVDP case. Ultimately, though there are three points (1) there may be OVDP appeal rights in the future, (2) you may have to later opt-out, or (3) you may get TAS involved. In either scenario,  the greatest favor you can do for yourself to make your case as solidly built as possible.
 http://www.irsmedic.com/2014/09/22/ovdp-streamlined-procedures-willful-blindness/