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Well, another tax season has come and gone. When it comes to taxes, there are two things to worry about, filing on time and audits. Since a majority of people have filed their taxes by now, we thought it would be beneficial to talk a little about IRS audits. Here is a look at some facts you should be aware of when it comes to being audited by the IRS.

The first thing you need to be aware of is that the IRS is being way more aggressive with audits than it has in a long time. We have all seen the recent financial drama caused by Government spending, which has dramatically increased in the last 10 years. For example, from 2002 to 2008 the national deficit increased 3.5 Trillion Dollars. And from 2009 to the present the national deficit has increased almost 2.5 Trillion Dollars more. How does the government plan to pay for the increase in debt? Well, the main source of funding for the government is through taxes. This means that the IRS is increasing, and will continue to increase, its efforts to collect taxes to help fight this dramatically increasing debt. The IRS will do this through auditing individuals and small businesses.

In addition to standard IRS audits, there is an increase in IRS letters going out questioning various tax deductions claimed on tax returns. Many people don't know how to deal with these letters from the IRS, so they just pay the bill and end up paying anywhere from a few hundred to a few thousand dollars in unnecessary tax.

Another way we can tell that audits are increasing is the amount of auditors being hired by the IRS. For example, a few years ago there were only two auditors in the entire state of Utah. Now there are over twenty. And in addition to more auditors, we have also noticed an increase in auditors making in person contact with individuals they suspect of owing tax by going to their homes and places of business. It has been years since we have seen actual IRS auditors going to someone's house or job. But in the last six months, we know of three people have an auditor show up in person to their home or work.

We are not giving you this information to scare you but to motivate you. We simply want you to know that you should be prepared.

There are several things you can do to be prepared. One great resource can be found at http://avoidbeingaudited.com/. They have some great tools to help you avoid being audited and to help you in case you are audited.

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Getting a letter in the mail from the IRS can be very intimidating to the taxpayer. This is because the media & sometimes family & friends portray the IRS in such a negative light that we can overreact. But, there is really no need to worry until you open up the letter and see what it says as there could simply be a minor error on your tax return.

Follow the IRS Instructions in the Letter

First, read the letter to understand exactly what the IRS claims is an error on your income tax return. If the error is minor, such as a missing signature or an incorrect social security number, often times the IRS will just ask you to review your tax return & provide the correct information by a certain date. Make sure that you follow through & provide the correct information by the due date. If you used a tax preparer to file your return, make sure to consult with them as well before sending in the requested information to the IRS.

An Error Doesn't Mean You Are Necessarily Getting Audited

Receiving a letter from the IRS indicating that you have errors on your tax return doesn't necessarily mean that you will be getting audited. Mistakes happen & the IRS realizes that as they make them too. So, don't worry about a potential audit should your tax return have a minor error on it.

What if you Discover a Material Error

In some instances, as you are reviewing your return you may discover a material error such as incorrectly reporting marital status, deductions, or income. If this is the case, you should notify the IRS & file an amended tax return. You will need to complete FORM 1040x which cannot be filed electronically. It is best to have a licensed tax preparer (i.e. CPAs, EAs) complete the FORM 1040x for you even if you filed your original tax return on your own. The licensed tax preparers are more experienced and aware of potential mistakes when filing the amended return.

Your Refund Will Be Delayed

It is almost a certainty that your refund will be delayed if you are notified of an error as detailed above. Your refund is calculated based on the tax return information you provide and thus will not be processed quickly if the IRS needs to confirm certain details with you first.

Ryan S. Himmel is the founder of BIDaWIZ - the online marketplace for trusted answers from licensed business professionals (i.e. CPAs, CFAs, CFPs & More).

Visit us at BIDaWIZ to get help with your irs issues from top tax experts.

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ByJoshua Trumson

In his give-away: Free Man's Manifesto Ryan Moran challenges the concept of being free and defines it as the ultimate reward. He points out that even financial freedom is not about how much money is in your bank account. It simply means, he says, to be free from a boss, the government, poverty, and other unnecessary responsibilities. This way you are able to lead the life you want in the way that you always wanted, live where you want to live etc.

He claims that this is actually more attainable than most people think, although it definitely is harder though, because you have to take matters into your own hands and take on the responsibility of your freedom. He posses a challenging question: What if you didn't have to conform to society's standards and instead live life on your own term?

That question really stroke a chord when I contemplated it myself. And then thought a little more after being reminded of the Story of the Yale Graduating Class of 1953. The story basically tells about how the students were surveyed to see how many of them had clear goals that they had written down about their future. Only 3% of the class had such goals. Twenty years later, a follow-up study revealed that those 3% individuals had out-earned the other 97% combined. So the lesson is to know what you want, and you have a higher chance of actually getting it. It's a very simple concept but we generally don't do it.

So step one is to define what your goals are clearly. The hard step is the next. Step Two is being upfront about what you will be giving up in order to get the things you want. For instance if you want total freedom you may have to give up your possessions. If you own several cars, you have to sell those that are not essential. Ryan Moran talks about how he gave up the idea of owning a home altogether! People would think he was crazy.

Instead, he set himself up to rent a nice place and rent out the extra rooms. By doing things like this you may not need to be tied down to your current job if you hate it. But you definitely would need to make some sacrifices. Here's another good one: Giving up one hour of sleep your first year to start a profitable income stream is worth it if you're trading it for an 8 hour job.

He reminds us that you don't need a million dollars to quit your job, just a cash flow of about 3K or so per month depending on what works for you. It's a pretty good idea to just write down and clarify how much money you would need to per month to cover your essential expenses and allow you to afford the free lifestyle you want.

Well you should have plenty of ideas bouncing in your head right now, so this is a good spot to finish this article.

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