Learn Portuguese (Portugal): O ano seguinte foi difícil.

Próximo is usually used when talking about the future relative to right now (for example, "next year" counting from today). Seguinte is used when talking about the next thing in a sequence, especially in the past. Because this sentence is telling a story about the past, we use seguinte to mean "the following year".

Is foi the past tense of ser (to be) or ir (to go)?

Here, it is the past tense of ser (to be). The verbs ser and ir share the exact same forms in this past tense (the Pretérito Perfeito). You have to use the context of the sentence to tell them apart. Since "the year went difficult" doesn't make much sense, we know it means "the year was difficult".

Why use foi instead of the other past tense for "was", era?

Using foi treats that year as a single, completed block of time that has finished. If the speaker had used era, they would be setting the scene or describing an ongoing background state. Using foi sums up the entire year as one completed, factual event.

Why doesn't the adjective seguinte change to end in "o" to match the masculine noun ano?