One might ask why taxpayers would even consider settling at the Examination level if Revenue Agents are so hard-nosed and Appeals is so favorable to settlement. One possible advice is: "Settle at the Examination level whenever a reasonable result can be obtained there. No one should give Exam short shrift with the idea in mind that a better deal can be struck at Appeals. First of all, if the facts have not been sufficiently developed, Appeals will send the case back to Exam (for such things as substantiation of expenditures). Furthermore, a better deal may or may not be struck at Appeals, and it would be an expensive gamble for the client."

What do you think? What would you advise your client about dealing with Exam vs. Appeals?