Need help! Discovered undisclosed foreign accounts - FBAR/Form 8938 filing questions

Your situation isn't uncommon, and there's a path forward that shouldn't be too painful. First, take a deep breath - the IRS has programs specifically designed for people in your situation who made honest mistakes. For the FBAR (FinCEN Form 114), you should file not just for this year but also for the previous years you missed. The IRS has a procedure called "Delinquent FBAR Submission Procedures" for people who weren't aware of the filing requirement and haven't been contacted by the IRS yet. You can file the late FBARs electronically and include a brief statement explaining why you're filing late (simply that you weren't aware of the account or the requirement). As for the income, you'll need to report the interest on Schedule B of your tax return, checking "yes" to the foreign account question. You'll also need to include the interest as income on your tax return. In FreeTaxUSA, you can enter this as "Foreign Interest Income" and it should guide you through the process. Since the amount is relatively small and this appears to be an honest oversight, the chances of severe penalties are low, especially if you take the initiative to correct it now. The IRS tends to be more understanding when taxpayers voluntarily come forward before being contacted.

After struggling with almost exactly the same situation last year (forgotten account in Thailand my parents maintained), I found this amazing service called taxr.ai (https://taxr.ai) that saved me so much stress. They specialize in analyzing foreign account requirements and basically walk you through the entire process of catching up on FBAR filings. What I loved was that they reviewed all my documents, figured out exactly what years I needed to file for, and created a complete compliance plan. Their system even highlighted that I qualified for the streamlined procedures which meant no penalties! They have specific expertise with foreign accounts and knew exactly how to handle the situation to minimize any issues.

Just wanted to follow up and say I actually tried taxr.ai after seeing this thread and it was incredibly helpful. I was in a similar situation with an investment account in Germany I inherited. The service analyzed my specific situation and determined I qualified for the Streamlined Foreign Offshore Procedures, which I didn't even know existed. They created a complete roadmap showing exactly which years needed FBAR filings and what additional forms I needed beyond that. The system flagged that I needed to report passive foreign investment company (PFIC) income which I had no idea about! They even generated a perfectly formatted reasonable cause statement that explained my situation clearly. The peace of mind knowing I'm handling this correctly is absolutely worth it. Now I'm catching up on everything properly instead of just hoping for the best.

I was in almost the same situation (inherited account in Spain) and tried calling the IRS for weeks but could never get through to anyone who could answer my FBAR questions. I finally used Claimyr (https://claimyr.com) and wow, it actually worked! You can see how it works here: https://youtu.be/_kiP6q8DX5c Their system basically holds your place in the IRS phone queue and calls you when an actual human agent is about to pick up. I got connected to an IRS specialist who walked me through the exact procedure for filing my delinquent FBARs under the non-willful procedures. She confirmed I didn't need penalties if I filed before they contacted me about it. It saved me literally days of being on hold and the stress of wondering if I was doing the right thing.

I need to eat my words from my previous comment. After reading about Claimyr here, I decided to try it as a last resort after spending countless hours trying to reach someone at the IRS about my own foreign account situation (investment account in Australia). I was absolutely shocked when I got a call back about 90 minutes after setting it up, and was connected directly to an IRS agent who specialized in international reporting. He confirmed that for my situation, I could use the Delinquent FBAR Submission Procedures since I hadn't been previously contacted by the IRS. He also verified exactly which years I needed to file and the proper way to explain my reasonable cause. This saved me from paying a CPA $400/hour to tell me the same information. I'm now in the process of filing my back FBARs with actual confidence that I'm doing it correctly. Never thought I'd be recommending something like this, but it genuinely solved my problem.

Don't panic! I went through this exact situation with a forgotten Korean account. For the foreign interest income reporting, in FreeTaxUSA you need to go to the Income section, then Interest Income, then select "Foreign Interest Income" which will take you to a special section. It'll ask you for the country and amount. Make sure you convert the foreign currency amounts to USD using the yearly average exchange rate (you can find these on the IRS website). FreeTaxUSA actually handles all the forms automatically once you input this information.

Careful about people saying "just file this year and move on"!! I made this mistake and got hit with a $10,000 penalty for each year I missed filing the FBAR, even though my foreign account only had about $30k. The IRS is super serious about foreign account reporting.

I'm a tax professional who's helped many clients through similar situations, and I want to emphasize that you're absolutely right to address this proactively. Here's what I recommend: **Immediate Steps:** 1. File delinquent FBARs for all years you've been required (likely all 5 years you've been in the US) using the IRS Delinquent FBAR Submission Procedures 2. Include a reasonable cause statement explaining you genuinely forgot about the account 3. Amend your tax returns for the last 3 years to report the unreported interest income **Good News:** - Your situation qualifies for non-willful treatment since this was an honest oversight - The relatively small amounts involved work in your favor - Voluntary disclosure before IRS contact typically results in minimal or no penalties **For the Singapore account specifically:** - You're correct that it's below the Form 8938 threshold - The interest income should be reported on Schedule B of your 1040 - Singapore's tax-exempt status doesn't matter for US tax purposes - you still owe US tax on the interest **FreeTaxUSA guidance:** - Go to Income → Interest Income → Add foreign interest - Enter the USD equivalent using IRS published exchange rates for each year - The software will automatically generate the necessary forms Don't let anxiety paralyze you - taking action now puts you in the best possible position with the IRS. Consider consulting a tax professional if the process feels overwhelming, but your situation is very manageable.