Knothead is very correct. As a custom rod builder I have been audited three times in the last twelve years. The last time the IRS agent was at my shop for five days! On the other occasions their were two agents. Granted my shop is rather large but I know of smaller operations that have also been audited. Good record keeping is a must. Depending on where you are state sales tax may also have to be collected. This sounds complicated but its really not and I passed my audits. If I can be of assistance please let me know.