You only file form 3520 for gifts and inheritances in excess of $100,000, not income. Unless you have a foreign trust.
For the income earned on the foreign investments, you will just report that on the same forms you report the same type of income earned in the US (Schedule B for interest/dividends, D for capital gains, etc.).
You're ahead of the game in that you're already thinking about potential consequences.
Remember if you're paying tax on any of that income in the other country (many countries deduct taxes right from the account for interest and dividends) that you are eligible to take a credit for those taxes on your US tax return.
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