The purpose of IRS Appeals is summarized in IRM 22.214.171.124(1), Appeals goal is to settle cases without having the case go to Tax Court. The Internal Revenue Manual requires the Appeals Officer to be fair and impartial on your case. In fact, they are to be so fair and impartial that they are not allowed to speak to the Revenue Agent who examined the Return, Rev. Proc. 2012-18, 2012-10 I.R.B. 455 (2012). If you find out that the Appeals Officer spoke to the Revenue Agent without you being present you can get the Appeals Officer disqualified from your case.
I never take a case directly from Exams to Tax Court. In doing so you lose the ability to minimize the issues in Tax Court. By going to Appeals before Tax Court you can likely reduce the amount of items that were proposed by Exams. The more you reduce in Appeals the less you have to litigate in Tax Court. It is ok if you don’t agree completely with the Appeal’s Officer in Appeals. As to the matters you do agree the Appeals Officer will write up a new report that report will be turned into the Notice of Deficiency. Interestingly, the items reduced in Appeals will not be brought up in Tax Court. Thus, by going to Appeals you have reduced what needs to be fought in Tax Court. Think twice before going directly from Exams to Tax Court.