This is exactly how the IRS treats all non-resident US tax payers. My ex, a joint Canadian/US citizen, had a problem with her taxes one year. The CRA (Canadian Revenue Agency) sent a letter that basically said "You appear to have made a mistake on your taxes, we think you owe an extra $XXXX. Check with your accountant, sorry for the bother if this isn't correct." the letter from the IRS basically said "You have defrauded the US Government of $YYYY. You will be arrested if you return to the US. You will be extradited if your country of residence supports extradition for Fraud. Fraud of this amount can result in <list of horrible penalties>"
Her accountant cleared it up in a few days, apparently someone at the IRS had made a mistake about Canadian Tax Law and reported the problem to the CRA which didn't verify it. It was a scary couple of weeks until we got the letter from the IRS which said the taxes were fine but included a warning about not letting this happen again.
Whatever happened to innocent until proven guilty? People make simple mistakes all the time. With something as bloated and obtuse as the US tax code the margin of error for honest mistakes is drastically increased. Criminal action should be classified as preemptive malicious intent. Glad to hear things worked out to you. Props to the CRA for it's professional conduct.
Also, many parts of the tax act have grey areas where even the CRA/IRS is unsure. You can call the CRA/IRS several times and get different opinions on a situation depending upon which agent you talk to.
Her accountant cleared it up in a few days, apparently someone at the IRS had made a mistake about Canadian Tax Law and reported the problem to the CRA which didn't verify it. It was a scary couple of weeks until we got the letter from the IRS which said the taxes were fine but included a warning about not letting this happen again.
I'd have renounced just for that bullshit.