Accidentally marked No on 1040 Schedule B Part III and efiled (although I've filed 8938 and FinCEN Form 114)

[GA38]

Although I've filed 8938 and have also filed FinCEN Form 114, I accidentally marked No on 1040 Schedule B (At any point during 2022 did you have financial interest in or signature authority over a financial account located in foreign country?). Do I need to file an amendment or how do I correct it?

[JohnW152 · Accepted solution]

No, you don't need to amend your return to correct this information. It's not even something that the IRS transcribes. 

However, a "Yes" answer would tip off the IRS that you may need to file Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign G....  It can be filed separately from your Form 1040-series return.

To see if you're required to file, please see Who Must File in the Instructions for Form 3520.  Note that penalties can apply if Form 3520 isn't timely filed.

When filing, you might attach a letter describing your error when filing your tax return.

[GA38]

Thank you @JohnW152! Not sure what "It's not even something that the IRS transcribes" means. Can you please elaborate?

The only concern I have is that I read somewhere that incorrect information here (Schedule B, Part III, Q7a) could result in penalty (I believe up to $10,000). Since this is unintentional I was wondering if filing an amendment would help alleviate this penalty risk.

The only foreign account I have contains the securities form my prev employer and hence it does not look like I need to file Form 3520 and I have already filed Fin 114 and Form 8938 with the original filing.

[DaveF1006 · Accepted solution]

What is meant by that is the IRS does not require an amendment to correct this type of mistake as long as you have filed the right forms such as the Fin-Cen and 8938. Filing an amended return will not make a difference.

[GA38]

Thank you @JohnW152! Given that it is free to file an amendment using TurboTax, is there is any downside to doing that or is it generally not recommended to file amendment unless absolutely necessary?

[JohnW152]

No, there's no downside, and if it alleviates any concerns you may have, by all means amend.

@GA38