I don't see any problem with an IRS audit.  We bill for copies as income and write off our expense for our copy bill.  That is appropriate.  The problem would be if you didn't claim the income, but still wrote off the expense.

I actually feel more comfortable NOT including the time/cost of making copies in our basic fee.  It is more fair to those who don't ask for full copies of everything.  And since we write up everything regardless of whether they get copies or not, I feel that those who want the copies should pay for them and not everyone else.

The small mark up on copies seems most fair to me... that way only those who want us to make them are paying for the service because that cost is not built in to our standard fee.

Best,
Robert A. Franco
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