Streamlined filing from Denmark: catching up on US taxes

The typical story in Denmark is not tax evasion. It is someone who moved for a job or a Danish partner, paid a lot of Danish tax for years, and discovered the U.S. filing obligation from a bank letter, a colleague, or a passport renewal. That is the profile the Streamlined Foreign Offshore Procedures were designed for.

Who the programme is for

The Streamlined Foreign Offshore Procedures let a qualifying U.S. person living abroad file the most recent 3 years of delinquent or amended returns and the most recent 6 years of FBARs, with the offshore penalty set at 0%. Two conditions gate it: your failure to file must have been non-willful, and you must meet the non-residency test — at least 330 days abroad in at least one of the last three years.

Why the Danish case usually ends near zero tax

Denmark's combined municipal and state income tax, with labour-market contributions, produces an effective rate on employment income that generally exceeds the U.S. rate on the same income. The Foreign Tax Credit on Form 1116 credits qualifying Danish income tax against U.S. tax on the same income, category by category. For a salaried American in Denmark, that commonly leaves little or no U.S. tax on employment income across the catch-up years.

That is the good news and the trap in the same sentence. Owing nothing does not remove the requirement to file, and the penalties that attach to unfiled information returns — the FBAR, Form 8938, Form 8621 — attach regardless of whether tax was due.

What actually makes a Danish catch-up complicated

• Danish and European funds in a Saxo, Nordnet or bank portfolio. Each PFIC generally needs its own Form 8621, for each year in the catch-up window, under the §1291 default.
• An Aktiesparekonto opened since 2019. Whatever is inside it has to be classified holding by holding for every year covered.
• Pension arrangements. Classification questions that are hard enough for one year get repeated across the window.
• Six years of DKK peak balances. The FBAR years need each account's maximum value, converted at each year's December 31 Treasury rate.

What a Streamlined submission contains

1. the most recent 3 years of Forms 1040 with all required schedules and information returns
2. the most recent 6 years of FinCEN 114 filings, submitted electronically to FinCEN
3. Form 14653, certifying non-willfulness and the non-residency test, signed by you
4. Payment of any tax and statutory interest due with the returns

Atamatax prepares the return side: the year-by-year Forms 1040, the Form 1116 credit for Danish tax, the Form 8621 workload for any PFICs, and the FBAR values with filing instructions. It does not generate Form 14653, assemble the final mailing, or transmit anything to the IRS or FinCEN — those remain yours or your adviser's.

Timing

There is no statutory deadline to come forward, but the programme is closed to you once the IRS has initiated an examination or otherwise contacted you about the years in question. Danish institutions report U.S. account holders under the FATCA intergovernmental agreement, so the information flow does not wait for you.