Tax Dangers for Greek-Americans in selling Greek Real Estate

Daphne Papayiannis (fictitious name) has been a law-abiding US citizen all her life, working for a school district as a teacher. The school district maintains strict ethical background check requirements, as it should.

About 5 years ago Daphne uncle in Greece told her that he could sell some of her inherited real estate there and so she signed the Greek Power of Attorney he sent to her. The uncle explained that, on the Greek Dee, 40,000Euros would be listed, but that the real purchase price would be 170,000Euros. The uncle closed the deal and deposited in the client's Greek bank account the checks, one for 40,000Euros and another for 110.00 Euros (after costs) from the seller. The client then wired 150,000 Euros to hear US account.

Now, two years later, comes the Notice = Πρόσκληση from the Greek Tax Authority "ΔΙΕΥΘΥΝΣΗ ΦΟΡΟΛΟΓΙΚΩΝ ΕΛΕΓΧΩΝ & ΕΙΣΠΡΑΞΗΣ" (audit division) and guess what they attach? They have found both checks deposited into her account from the buyer; the sales agreement filed; and the wire memo as to the amount of the wire. They demand an explanation as to whether the Greek State has been fraudulently harmed by the tax evasion of Daphne - and she needs to present her case. She is suspected of "money laundering" because the amount she declared on the sale. Since she did not file any E1 tax form in Greece (identifying income from other sources in Greece) the amount exported to the US is suspicious and unexplained. Daphne does not want to be in this situation. (Although if she is, we can help).