The significance of the affidavit with respect to taxes is that it can substitute for receipts or canceled checks in the event other records are unavailable. It is well settled that oral testimony can be accepted as proof of a claim made on a return. The affidavit is nothing more than oral testimony presented in the form of a written statement. A good example of how one may use an affidavit is in the case of cash contributions made to a church or other charity. A simple log of these contributions along with an affidavit can capture hundreds of dollars in deductions you thought you could not claim.
Affidavits are also the key to being able to conduct an audit through the mail.
You simply convert your letters of explanation to affidavits which can eliminate the need to be present during an examination. Of course the main advantage of a correspondence audit is that you are never caught off guard and never in a position to respond to questions irrelevant in determining the correct of amount of tax you owe. Lowering your tax can be quite easy, fun and certainly rewarding when you learn a couple of tricks. Following are five techniques I discovered in my search for creative ways to lower my own taxes. This trick is especially useful if and when we get a flat tax and lose our remaining deductions.