The IRS can never ask you to close a branch of self-employment.
If it does continue to have losses, one of the things IRS would look at are the forecasts of profitability and how the business is being run. If you have a well laid out plan and see profits in the future, and want to keep going with it, then go for it.
IRS really looks at business activities that have no potential to turn a profit and have a pleasure element to them (such as raising horses that are primarily to ride). Your activity does not sound like that.
Now, do you have a greater risk of an an audit with a loss activity, yes, you do. However, if it accurate, then you need to show it on the tax return.
