The GAO, a federal inspection agency, recently found that IRS audits of sole proprietors yields less revenue per hour than IRS audits of other entities. This is because sole proprietors generally have lower gross receipts than other entities, such as corporations. So despite significant noncompliance, these types of audits turn up less additional taxes and penalties. 

But despite finding more money elsewhere, the IRS will not let Schedule C filers off the hook because of the high levels of noncompliance. The IRS will not send any signal that its ok to fudge on your taxes.