According to the Green Book, how should taxpayers respond to tax issues discovered during an audit?

In the context of handling tax issues discovered during an audit, the guidance provided in the Green Book emphasizes the importance of cooperation with the Australian Taxation Office (ATO). When taxpayers actively engage with the ATO by providing accurate and complete information, it demonstrates their willingness to comply with tax laws and address any discrepancies. This collaborative approach can lead to a more efficient resolution of issues and may mitigate potential penalties or further complications.

The act of cooperating allows taxpayers to clarify misunderstandings and provide context for their financial situations. It also fosters transparency, which is essential during an audit process. By being forthcoming with information and supporting documentation, taxpayers help the ATO make informed decisions, which ultimately benefits both parties.

It is crucial for taxpayers to take tax matters seriously and not postpone their engagement or response, as issues left unaddressed can worsen over time, leading to escalated penalties. Consulting with professionals, while beneficial in some scenarios, should not deter direct and honest communication with the ATO during an audit.