How a refund of $167 can turn into a seizure of $55-75K or even more..
There are millions of people in the USA of modest income who are dual nationals and have their name on overseas bank accounts. There is now a focus on foreign tax evasion, which, while intended to stop the rich evading taxes, the law is being applied to middle and low income people too who are not tax evaders and don't even owe money after reworking their tax forms.
Recent changes, backdated to 2004, allow the IRS to penalize individuals $10-100k per account per year and face criminal prosecution. The only alternative is what the OVDI, the offshore voluntary disclosure initiative which will confiscate 27.5 % of peak assets. This is simplified but investigation of the FATCA and OVDI programs explain more of the fine print. This is now a reality as the US has agreements for information exchange with most likely countries.
In our case we have already spent $12k on attorney fees and filed modifications to taxes from 2004 to date under OVDI as we're scared to risk the IRS coming after us with criminal charges because we complied with UK tax law not US. The modifications resulted in a net refund of $167 due to us had we known what to do. We expect the 'offer' under OVDI to be $55-75k we will have to pay, money we can't afford, and an astonishing penalty for being honest and not actually having evaded any taxes. We can accept and avoid up to 10 year prison sentences, once again for no wrongdoing. We can opt to not accept the settlement and fight in court but we do not have the money to do this and risk penalties of around $3 million as the IRS would seek the maximums.
This is this government once again picking on a minority and intimidating them into excessive penalties. This involves any US taxpayer who has a name on any foreign asset. It's wrong, and we needs funds to fight this injustice that effects millions.
We need your help to take this fight all the way through the courts. The govt knows people like us can't afford the legal fees. Please help us to make it happen.
Please help us to fight for what is right. This government needs to represent the people not persecute minorities.