the code is not just for statistical purposes and it is important that you use the correct code for your type of business. Each code has its own types of deductions on the schedule C and by putting in the correct code the IRS can compare your business to other businesses such as yours to make sure you're in alignment with your type of business expenses. For instance if you do sales of consumer products the IRS would expect you to have an inventory figure however if you mow lawns they would not expect inventory on your schedule C. Sadly this is how they pick returns for audits so again it is important that you pick the correct category.
