[SLSTech]

how would the irs audit these companies that are participating in such activities?

Pretty easy - they audit a HO, find the receipts that they must keep
They then see what said company pulled & audit them
They then have a list of every HO that they are then going to audit also

 

[SLSTech]

How are companies offering free installations without being audited?

The paperwork hasn't been turned in yet - they might do a few quick high profile ones next year as a warning / damage control when the press catches it & sit on the rest for a couple of years - I mean as soon as they can based on there backlog

 

[SLSTech]

I always mark up windows or any other product I sell and I never broke out installation before, if the IRS needs a break down, I will list it at $45 per opening, since a helper and I can do 2-3 openings and hour, that will look like a reasonable number, but there will still be mark up in the windows.

Do the rules say there can be no mark up on the windows?

Since this is the same energy tax credit that is being used to get a 30% rebate on A/C systems, am I expected to give an equipment price and an installation price?

No - HVAC includes labor
I posted this before but here is a quick overview and links to most FAQ's
http://blog.sls-construction.com/?p=323