Prospect is a US citizen and resident of a foreign country. Has foreign accounts. Files an FBAR annually.
2020 return was filed solely to claim the RRC that was not paid out via EIPs. No income or activity other than that. Zero income and no tax liability. A Schedule B with Part III was not filed with this return.
Technically, a Schedule B with Part III is not required to be filed if a 1040 is not otherwise required to be filed. i.e. You don't have to file a 1040 just to file a Sch B. However, in this situation, a 1040 was filed. Do we need to amend and include a Sch B? Penalty exposure for failure to file a Sch B or appropriately fill out Part III when the taxpayer has a foreign account is pretty egregious.
Thoughts? Please assume an extension was not filed.
Chances the IRS will automatically assess a penalty if we file amended with a Sch B?