For the 2016 returns you just report the correct amounts on her final return and the remainder on your return and document in the tax records you keep that the total has been reported.
The bank need to be notified and the account switched to your name so this does not happen again for 2017 tax year.
There is really nothing you can do at this point to notify IRS. If you filed a paper return and sent an explanation with it, you still may get a letter from IRS a year or two from now.
But if you do file a paper return for your mother I would attach a statement as to how the interest income was allocated.
