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1. If IRS find Rules are broken i.e. Return is not filed correctly (i.e. individual capital gain related trade is not reported ) what is the penalty?

Yes penalty of perjury but she is not lying or hiding - its just not giving full details because of difficulty to convert all those 3000+ trades to US equivalent. 

2. She had been filing FBAR without fail so that should not be issue.

3. She does not need to file 8938 because her total assets is way below required  threshold.

4. We want to file like how IRS requires it but can you me idea how to convert those trades to IRS acceptable format? They are in Rupees and also Indian tax year is March to April