certificate of coverage for self-employmnet

Hello, first post, I have been reading posts regarding streamlined procedure and certificates of coverage and don't find an answer dealing with my specific question. I hope someone can help.

I need one of these to file with my streamlined procedure. I am a UK/US dual national.

I sent for one and it states that I am covered from the day I applied for it, rather than the day my self-employment started 9 years previously. I have called and asked for the certificate to reflect the dates that I became subject to UK laws on social security (i.e. when I took up residence) and HMRC has agreed to send me an amended form.

My question is - how long do I wait for it? I am considering sending off the form I have and noting on it that the information is incorrect and I will send the amended form when received, if required, in addition to filing it with future returns

 Alternatively, I could attach a letter saying that my certificate of coverage needs to be amended and is on its way. I have paid an enrolled agent to produce the tax returns and he has noted that I am covered by the UK/US tax treaty. He has also told me to get a certificate of coverage as he finds some of his clients are being asked for them.
And yes, I will ask him once his office opens next week what I should do. Just feeling antsy now and looking for opinions.

I started the streamlined procedure months ago. I applied for the original certificate of coverage in May and HMRC sent a copy to US social security. I understand that if the IRS starts a civil investigation I can no longer use the streamlined procedure. At what point will they start one of these? I understand that I get 20 days to respond to a 'notice letter'? Is that correct? Is this what gets sent out in the first instance?

I want to fill in everything correctly, however I don't want to wait too long and find myself ineligible to use the streamlined procedure. I am expecting replies telling me that the US govt takes a long time to send out letters. I am wondering the implications for me if I get one and whether I am better to send off what I have. I am very keen to get this procedure over with.

The US/UK totalization agreement makes no mention of a certificate of coverage. This obligation is simply an interpretation by the US Social Security Administration; albeit that a certificate of coverage is nice to have. Every US tax adviser in the UK adds a statement or footnote explaining that his or her client is covered under the agreement. What words did your adviser include? I have prepared several tens of thousands of US returns but have not seen a certificate of coverage requested by an IRS agent since the mid to late 1990s.

Why do you think you are at risk of a "civil investigation"? This would be unusual unless you held money in a bad bank, say in Switzerland, or you were advised to evade tax by a dodgy lawyer or accountant whom the IRS have criminally prosecuted.

On what grounds can you not file the returns and a statement of non-wilfulness on Tuesday if everything is done correctly? Are you doubting your tax adviser?

My advisor has said that sometimes the IRS asks for certificates of coverage and has advised me to get one. He has also advised I follow streamlined filing instructions 'pretty much to the letter'. 
When reading what I was supposed to do when submitting tax returns as a self employed person I see I am supposed to attach a copy of my certificate of coverage. I don't want to submit one which says I only became covered by UK laws on social security in 2016, and I dont think that attaching a note to it saying that this information is wrong but I have not received an updated letter yet is a great idea either.
I don't know what a civil investigation is. I know that when I sent for my certificate of coverage in May this year HMRC said they were sending a copy to the social security administration. They have sent them a letter saying that I began self-employment in 2007 and only became covered by UK laws relating to social security in 2016. I dont know if this is enough to - (eventually-when?)- trigger an investigation or whether they will send me a letter of enquiry (a notice letter?) first. On this forum I have read that letters to the UK sit in a sack till the sack is full and then are sent to the UK where they are sent out 2nd class, and that the letters give 20 days to reply,and also that the IRS can mangle foreign addresses. Thus I am keen to get everything done and dusted before there is a likelihood of my receiving a letter.  I raised the issue of the dates on my certificate in a three page summary of the documents that I sent my advisor,but I guess that the issue was missed.  I would like to have my concerns allayed that someone in the IRS will read that letter and decide to charge me 9 years of self-employment tax. I have addressed this issue via phone with advisors at HMRC and they have said they are happy to send a letter with the correct information. That is that I have been covered by and paying into UK social security since I arrived in the country.
 I very much hope this happens, and happens soon. I will send them a letter summarising the conversation I had with them next week. My first certificate arrived pretty quickly, I am hoping for the same with the second.

The IRS does not have a process for reading correspondence. Your explanation of non-wilfulness will be what someone will read when they approve or deny.

You have not answered my question about exactly the words that your adviser has already included in a statement or footnote. These are the only things the IRS might just possibly read. What words are already included?

The US social security administration are not the IRS. Why do you think that the US social security administration will be telling the IRS about you and your certificate ? Are you a well-known celebrity perhaps? If not, why would a certificate of coverage be of interest to the IRS? Tens (possibly hundreds) of thousands of applications for certificates of coverage are made each year. I have never heard of a single one triggering an audit or criminal prosecution.

Even if the IRS do not approve your case for their internal streamlined procedures, do you believe you have "reasonable cause" for your delinquency? If you are not certain what this phrase means, you may want to seek an opinion on your statement of non-wilfulness from a US tax lawyer before approaching the IRS or FinCEN.

I would expect the social security administration to pass on information they find suspect to the IRS. That said, I have no information on how or whether agencies communicate, but isn't the whole point of sharing information to point up irregularities? I was under the impression that was why HMRC was sharing information with US authorities.

If I am not accepted under the streamlined procedure I am looking at producing 20 years of tax returns. Finding and collating the information for 3 to be done by someone else was an exercise that involved much angst. It is not an exercise I want to have to embark on. I am not clear I have sufficient records to go back that far, nor am I sure how to put the information I do have into the proper form, I will have to seek advice, and that will incur more cost. It will also be a stressful exercise, as this one has been.

The footnote by my advisor reads:

The Taxpayer is covered for social security purposes in the United Kingdom where she ordinarily resides. Self-employment tax is therefore not payable by virtue of the us/uk totalization agreement, effective from January 1, 1985. Because the taxpayer is subject to social security coverage in the United Kingdom  the taxpayers is not required to pay SECA taxes in the USA.

You ask me why a certificate of coverage would be of interest to the IRS. I can go back and check my facts, but I am pretty sure that they ask for it.

You are in the same position as hundreds of thousands of US citizens overseas who find US tax stressful. This is normal. You seem however to be mind-reading that the IRS have infinite resources and have perhaps James Bond or Sherlock Holmes available to investigate every lead. The truth is the opposite. The IRS have had their budgets slashed by hundreds of millions of dollars. They are due to get the first FATCA reporting from HMRC in May 2017 - but have no budget to create software to use any of it.  If you want more comfort than you could engage a lawyer to explain wilfulness to you.

There is no history of the IRS asking for 20 years of tax returns; the only conceivable occasions where the IRS might want more than 6 years are where they produce an SFR, under OVDP, or in major criminal cases. In the really unlikely event of the IRS rejecting you from streamlined the IRS would have to find a reason to audit your returns. There is no history however of anyone being thrown out of streamlined.  Why are you worried that you might be the first person from the 30,000 plus streamlined filings to be rejected?

US law is broadly similar to UK law. In the United States, government departments and agencies can only share data where permitted by Congress.  It would be a criminal offence for them to do anything outside of what is permitted.

The IRS do not require a copy of a certificate of coverage; which is what you are (incorrectly) pre-supposing.  The statement that you quoted and which is already included in the returns is clear and will not give rise to any IRS notices. 

I did not post seeking advice on the topic of wilfulness. I was under the impression that if I did not follow IRS advice re streamlining to the letter I was likely to be rejected from the program, and following the advice to the letter is the tax advice I have been given.  The IRS certainly reserve the right bar people from engaging in the program. I am glad to hear that you feel this is unlikely to happen.

 I will go back and check on the IRS website to see if I can find where I read I needed to submit the form with my tax return.
 

Have read some more.
So IRS does not ask for it and Social Security says I must attach it.  Confusing.
I take your point about asking about whether I am likely to be found wilful or not.
I am torn at the moment between spending money asking for an opinion, and saving the money I would spend doing this for the fines. I have certainly made a number of misinterpretations, and have now discovered the world of reasonable cause.