2026-01-17T10:24:44+00:00
The U.S. Supreme Court on Monday rejected a bid by a group of Republican voters to revive a restrictive North Carolina voting law that required photo identification and limited the ways absentee ballots could be cast.
The court, in an unsigned opinion, left in place a January ruling by the North Carolina Supreme Court that struck down the law as racially discriminatory. The Republican-led state legislature had passed the law in 2018.
The voters had argued that the north Carolina court improperly considered racial bias in striking down the law, contending that the state constitution did not allow such considerations.
The Supreme Court’s conservative majority has previously signaled a willingness to limit the ability of courts to consider race in redistricting and other cases.
however, the court in this case found that the North Carolina Supreme court’s decision was based on state law and did not present a federal constitutional question that the U.S. Supreme court could resolve.
The ruling is a setback for Republicans who have sought to tighten voting rules in several states, arguing that such measures are needed to prevent fraud. democrats and voting rights groups have countered that such laws disproportionately harm minority voters and those with limited access to resources.
North Carolina’s 2018 law required voters to present photo identification at the polls, such as a driver’s license or passport. it also eliminated same-day voter registration and reduced the number of early voting days.
The North Carolina Supreme court found that the law was enacted with discriminatory intent, citing statements made by Republican lawmakers during the legislative process.
The case is Moore v. Circleville, No. 22-1063.
What is the Foreign Account Tax Compliance Act (FATCA)?
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The Foreign Account Tax Compliance Act (FATCA) is a U.S. federal law enacted in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act, requiring U.S. taxpayers with foreign financial assets to report those assets to the internal Revenue Service (IRS).
FATCA aims to combat tax evasion by U.S. persons holding investments in offshore accounts. It does this by requiring foreign financial institutions (FFIs) to report information about financial accounts held by U.S. taxpayers to the IRS, or face a 30% withholding tax on certain U.S. source payments.U.S. taxpayers with specified foreign financial assets exceeding certain thresholds must also report these assets on Form 8938, Statement of Specified Foreign Financial Assets.
Example: In 2014, the IRS issued final regulations implementing FATCA, detailing the reporting requirements for FFIs and U.S. taxpayers. IRS FATCA Regulations. the first reporting deadline under FATCA was September 30, 2015.
Who is Affected by FATCA?
FATCA primarily affects U.S. taxpayers, foreign financial institutions (FFIs), and certain other foreign entities with U.S. connections.
U.S. Taxpayers: Individuals and entities who are U.S. citizens, U.S. residents (green card holders), and certain U.S. entities with ample ownership by U.S. persons are subject to FATCA reporting requirements if they hold specified foreign financial assets exceeding certain thresholds. These thresholds are adjusted annually for inflation. Such as, for 2023, single filers must report if their total specified foreign financial assets exceed $50,000 on the last day of the tax year, or exceed $75,000 at any time during the year. Married filing jointly have higher thresholds.
Foreign Financial Institutions (FFIs): FFIs, including banks, investment funds, and insurance companies, are required to report information about U.S. account holders to the IRS. Failure to comply can result in a 30% withholding tax on certain U.S. source payments.
Example: The U.S. Department of the Treasury published a list of FFIs that have entered into agreements with the IRS to comply with FATCA. FFI List Search. As of November 2023, over 180,000 FFIs are registered.
What are the Key Reporting Requirements?
The key reporting requirements under FATCA involve both reporting by FFIs to the IRS and reporting by U.S. taxpayers to the IRS.
FFI Reporting: ffis must identify U.S.account holders and report their account information, including account balances, income, and other relevant details, to the IRS annually. This is done through the IRS’s online reporting system.
U.S. Taxpayer Reporting (Form 8938): U.S. taxpayers meeting certain asset thresholds must file form 8938, Statement of Specified Foreign financial Assets, with their annual tax return. This form requires detailed information about specified foreign financial assets, including bank accounts, brokerage accounts, and ownership interests in foreign entities.
Example: The IRS provides detailed instructions and examples for completing Form 8938. About Form 8938. The penalties for failing to file Form 8938 can be significant,potentially exceeding $10,000 per violation.
Intergovernmental Agreements (igas) are agreements between the U.S. and other countries to facilitate the implementation of FATCA.
These agreements streamline the reporting process by allowing FFIs in participating countries to report information about U.S. account holders to their own governments, which then automatically exchange that information with the IRS. IGAs reduce the compliance burden on FFIs and ensure greater consistency in reporting.
Example: The U.S. has signed IGAs with over 110 countries and territories. FATCA IGAs. The agreement with the United Kingdom,signed on May 17,2013,is one of the earliest and most complete IGAs.
Potential Penalties for Non-Compliance
Non-compliance with FATCA can result in significant penalties for both U.S. taxpayers and FFIs.
For U.S. Taxpayers: Penalties for failing to file Form 8938 can be as high as $10,000 for each failure to file, and potentially higher for continued non-compliance. Additionally, taxpayers may be subject to accuracy-related penalties and interest on unpaid taxes.
For FFIs: FFIs that fail to comply with FATCA reporting requirements are subject to a 30% withholding tax on certain U.S. source payments. This withholding tax can significantly impact their revenue.
Example: In 2016, the IRS issued Notice 2016-31, providing guidance on the application of penalties for non-compliance with FATCA.Notice 2016-31. This notice clarifies the circumstances under which penalties may be waived.
