Bankrate's 2009 Tax Guide
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7 tax terrors and how to overcome them

5. Afraid I'll get audited

If fear No. 4 comes true, then this is definitely a legitimate reason to be scared. Audit fears, however, tend to be much greater than actual audit realities. True, there are some red flags, such as excessive medical or charitable deductions, that might catch an IRS examiner's eye. It's also true that, in response to lawmakers' urgings to close the tax gap, the IRS has increased audits in recent years.

But overall, the risk of audit remains small. IRS data shows that less than 1 percent of individuals earning less than $100,000 were audited in 2007, the most recent filing information available.

So don't let fear of IRS questions keep you from filing. And definitely don't let it stop you from claiming legitimate tax breaks.

"If you're really doing stupid things on your tax return, expect to get audited. Deservedly so," says Enrolled Agent Eva Rosenberg, who is based in Southern California and the Internet's Tax Mama. "But if you're afraid to use a legitimate tax break because you're afraid you're going to be audited, stop it! Stand up for your rights. There's no reason to be afraid."

The remedy: Make sure you can show an IRS examiner why you filed as you did. This means keeping good records, especially if you're self-employed. People who work for themselves and file Schedule C with their returns tend to get scrutinized a bit more, so your business record keeping needs to be more precise.

6. Afraid to e-file because my personal info could be lost or stolen

More than half of us (58 percent) sent our returns to the IRS electronically last year. But another 65 million, give or take a million, folks still filed the old-fashioned paper way. This fear is one of the contributors to that mind-set.

Yes, identity theft is a major issue. And yes, hackers still manage to break into online financial data systems periodically. But the IRS keeps careful track of e-mail phishing scams that falsely claim to be from the tax agency. The agency also has a special section that works with taxpayers whose filing data has been compromised by identity thieves.

The remedy: Any tax data transference requires two parties. Make sure the starting point of such a relay, your computer, is secure.

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"You're one of the end points and the IRS server is the other," says Gary Morse, president of Razorpoint Security Technologies in New York. "Make sure that your personal machine is secure, that it doesn't have any viruses, Trojan horses or any other back-door access points that could be attacked."

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