Follwing info provided by the WI DNR, we purchased 20 acres of land that was already under Managed Forest Law, where we intended to keep it. 45 days after the purchase was complete, we were notified that the DNR employee had given us incorrect information and we had, in effect, withdrawn the land from MFL status and owe back taxes, with penalties and interest, back to 1968. Do we have any options, giving that we checked all steps to purchase with the DRN multiple times before making the offer to purchase? If we have no options, can we list the taxes paid on our 1040 form for 2005? Is there any hope of getting the interest and penalities waived, as we followed their instructions to the letter? Eager in Eagle.

This question is too technical for me to answer given this is part of a special land sale program. But a suggestion is to go to court and contest the taxes as a bonafide purchaser for value under this program, and provide the court with the information that you relied on to purchase the program and that you are not to be charged with back taxes where you are not the owner and ask for innocent party tax relief.
it sounds like that they accumualted taxes on the property over the years while in state hands, but the state pays no taxes, so were taxing it all on the next private owner. But if this was not revealed to you as a condition of sale and it was an item addressed in the sales agreement, there are grounds to contest the assessment and argues that it is the state's responsibility to pay or the municipality's duty to charge the state and not the new property owners.
I suggest that you get local counsel on a matter like this, and get the people you worked with on the sale to work with you to get these taxes off of you. If not, an attorney that is local can ascertain if there is still time to rescind t he sale under state law, that may be an option with your monies being returned and the sale cancelled.