Few things strike fear into a person’s heart like the thought of an IRS audit. People harbor this fear, not simply because of the money that they may end up having to pay the government, but also because an audit can lead to a loss of property or even jail time. It can even lead to an extreme need for instant cash, like taking out multiple payday loans. While most people are honest and diligent in accurately reporting tax information, for those who are not, this nightmare can easily become a reality.

By avoiding the following activities, a person might also avoid an IRS audit:

A Return Filled With Errors

The easiest way to raise questions about a tax return is to overlook mathematical errors, careless mistakes or by forgetting to include important information. While this seems easy enough to avoid, many don’t take the time to double check their returns to be sure that the information is accurate and that it makes sense. By not doing so, unwanted attention is drawn to their tax return, which sometimes prompts an IRS audit.

Reporting an Extremely Low Income

Each job or career has an expected income level associated with it. When a person is working in a particular field yet reporting a salary that is far less than expected, this can prompt an audit. Although some people may actually earn less than others in the same field for any number of reasons, such can still raise suspicions and prompt an IRS audit. This is particularly true when an uncharacteristically low income is reported several years in a row.

Not Reporting All Income Earned

Many understand the importance of having multiple streams of income. However, people who work more than one job or those who provide freelance services must be especially careful about reporting all of their earnings. Not reporting every source of income and the amounts earned raises a serious red flag that may prompt an IRS audit. Each employer reports every employee’s income to the IRS, as do companies who pay for the services of certain 1099 workers. Therefore, the IRS knows how much money most people have earned even before the information is officially reported on a tax return. To fail to provide information on additional income will almost certainly result in an audit.

State Tax Returns Do Not Match Federal Tax Returns

Taxpayers are required to file separate returns for their state and federal taxes. When information filed on these returns does not match, an IRS audit may be the consequence. Again, it is very important to pay attention to all of the details provided in a tax return; check for errors and make sure that all information matches before a return is submitted.

Not Filing a Tax Return

Many claim to have found loopholes in the law that makes it possible to escape paying taxes. Others, who feel that income tax laws are unfairly imposed, outright refuse to file returns as a form of protest. People who do not file, however, do so at their own risk. Refusing to file a tax return is one of the fastest and easiest ways to encourage an audit.

While most people are never faced with an IRS audit, those who are find it to be a daunting experience. Whether the faulty reporting that led to an audit was part of an honest error or was a deliberate attempt at defrauding the IRS, few people get away with inaccurate reporting. By filing early, obtaining the help of a professional and paying close attention to detail, however, an IRS audit can be avoided.

Installment loans are aiding first-time home buyers make the purchase of their dreams. When moving to Phoenix, Arizona, Kostas Kalaitzidis longed for a home. Due to his low-income and the high-cost market, he was unable to buy. Just one year later, he was able to buy a formerly-priced $220,000 house for just $82,000. “I’m very glad I waited,” he says, “people like me are the ones buying now.”

Declining home values

It is estimated that 53% of all home sales are being made by people like Kalaitzidis, according to the National Association of Realtors. The group also says, “While America’s declining home values have wrought havoc on home sellers, owners and lenders, first-time buyers can celebrate the housing market bust, and may even help fix it.” They expect first-time buyers to comprise the bulk of buyers throughout the rest of 2009.

Although salary is a factor, most first-time buyers are making the move as a result of the huge decrease in home prices. For example, Kalaitzidis’ home boasts 2,200 square feet, four bedrooms and 2 ½ baths. At $82,000, it’s a relative steal in the real estate market. In addition, tax credits are plentiful for first-time buyers.

According to James Saccaccio, CEO of RealtyTrac, “The metro areas with the highest level of foreclosure activity paint a picture of concentrated problems in a relatively small number of hard-hit areas. Sales activity appears to be increasing in some of these markets as home prices have fallen to levels that are attractive to first-time homebuyers.”

New buyers are plentiful

Kalaitzidis is not alone. Many first time buyers are seeing homeownership as a potential accomplishment they could not have attained without the struggling market. Albert Ko of Orange County, California first moved to the area in 2007 when the average price of a moderate home was $800,000. He just was approved for $400,000 and most homes in the area have dropped to just about that level. “Two years ago, this would have been out of the question,” Ko confirms.

Though current homeowners are suffering the lost equity, new potential buyers are seeing affordable housing as a huge benefit. With the dream of owning a home as a viable option, they are looking to installment loans, family borrowing and extreme budgeting as methods of reaching their goals. For the first time, many potential borrowers are taking advantage of the recession and downfall of the housing market.

Burns Consulting Group study

According to Burns’ Consulting Group the average home costs 25% of the owner’s pretax income to sustain, down from 44% just three years ago. That means that a household with a $60,000 income is now spending about $15,000 a year for the fixed-rate mortgage, down from $26,400. That’s a substantial savings for a family.

Finally a homeowner

There is a light at the end of the recession. Many people who were formerly unable to even consider purchasing their own home are now enjoying the affordability brought about by the recession. Home values are down and down payments needed to purchase are much smaller. Some potential homeowners are working with lenders for installment loans to help fund their purchases as they move into the most-coveted title of “homeowner.”