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James M. McCarten

James M. McCarten
  • L.L.M., Taxation, Emory University (1991)
  • J.D., University of Missouri-Kansas City (1984)
  • B.S., Accounting, University of Kansas (1979)

Georgia, Missouri, Tennessee

  • American Bar Association - Member of Taxation, Business Law, Litigation and Real Property, Probate and Trust Law Sections; 1996 Chair, subcommittee on Practice and Procedure, Tax Litigation Committee of the Litigation Section
  • Member, Special Needs Alliance
  • Fellow, American College of Trust and Estate Counsel
  • Director, the Conservatorship Association of Tennessee (2009)
  • Tennessee Bar Association - Tax Section, Chair (2006-2007); Estate Planning & Probate Section; Member, Business Entities Study Committee
  • Middle Tennessee Estate Planning Council (2007-present)
  • Missouri State Bar - Tax Section
  • State Bar of Georgia - Tax Section
  • Fellow, American College of Trust and Estate Counsel
  • Best Lawyers in America, Litigation & Controversy-Tax, Non-Profit/Charities Law, Tax Law, Trusts and Estates (2003-2017)
  • Mid-South Super Lawyers, Estate Planning & Probate (2006-2013)
  • Special Needs Alliance
  • Tennessee Bar Association President's Award
  • Department of Justice Outstanding Attorney Award (1986)
  • Best Lawyers, "Lawyer of the Year," Litigation and Controversy - Tax, Atlanta, Georgia (2017)
  • Director ARC of Davidson County (2010-present)
  • Director, ASMT, Inc. (2007-present) (the autism organization for Middle Tennessee)
  • Working closely with IP counsel, formalized several unique business and manufacturing enhancements developed by the business owner followed by a tax-free reorganization of the underlying business to minimize the business owner's income taxes, but maximize the family's cash-flow when the business was acquired by a national enterprise.

  • Represented ex-spouse of "Final 4" accounting firm partner in a successful "innocent spouse" defense against assessment of taxes, penalties and interest exceeding $3 million.

  • Represented one of two shareholders of a substantial rehabilitation facility during a business divorce eventually resolved by a sale to a white knight and negotiated the put-call arrangement with the venture firm to increase capital gains, minimize ordinary income and maximize the client's total return.

  • Represented a for-profit enterprise in the design of a joint venture with a non-profit hospital and several local physicians.

  • Eli Lilly & Company v. Commissioner, Tennessee Department of Revenue. Represented pharmaceutical company in significant refund litigation over Tennessee franchise and excise tax liabilities. Successfully settled.

  • Assisted several publicly-traded financial institutions with the design and documentation of their non-qualified deferred compensation programs for directors and key executives under Section 409A and other tax statutes.

  • Main author of the Tennessee Revised Non-Profit Limited Liability Company Act Section 48-101-801, et. seq. (2006).

  • Through a combination of family partnerships, Tennessee Investment Services (Dynasty) Trusts, charitable and defined-value gifting, and sales to grantor trusts, Mr. McCarten assisted in the transfer of a Tennessee service business and other family business assets worth more than $50M to the second generation at a minimal Federal transfer tax cost.

  • Has successfully represented business owners and taxpayers in investigations and recommendations for prosecution by IRS Criminal Investigation Divisions, several times convincing the Department of Justice to decline IRS recommendations for prosecution.

  • Structured the legal documents creating a museum for a community in Tennessee and worked with the client throughout the IRS exemption application process.

  • Has organized several charitable cooperatives for health care organizations.

  • Worked on reorganizations of and acquisitions and mergers of various professional practices in the medical, accounting, architecture, engineering and legal communities.

  • Counsel for a number of community foundations throughout Tennessee.

  • Subsequently obtained a six figure award of attorneys fees under code Section 7430 for that same taxpayer. Smokey Mountain Secrets, Inc. v. U.S., 78 AFTR 2d 96-7603 (D.C. Tn. 1996).

  • Reorganized a single charitable organization into two charities and three for-profit enterprises owned by the charities which now generate significant taxable income.

  • Represented an East Tennessee economic development organization in resolving a seven figure sales and use tax dispute with the State of Tennessee.

  • Has successfully represented certified public accountants in administrative proceedings brought by the government to disbar them from practice before the IRS (under Circular 230).

  • Transferred ownership of a closely-held Tennessee manufacturing concern to the owner's children and trusts for the grandchildren using self-cancelling installment notes ("SCINs") saving the family roughly $15M in transfer taxes.

  • Represented a major Tennessee non-profit in exempting significant portions of its real property from property tax.

  • Brunswick Corp. v. Commissioner, Tennessee Department of Revenue. Successfully represented national company in settling separate franchise and excise tax and sales tax disputes with the Tennessee Department of Revenue.

  • Worked with plaintiff's counsel to structure the settlement of a $10M medical malpractice case by having the award paid to a special needs trust ("SNT"), thereby protecting the child's access to Medicaid/TennCare coverage. This representation also included the joint purchase of a home for the family by the SNT and the parents and utilized insurance trusts to protect the value of the award for the remainder of the family.

  • Represented one of two shareholders of a substantial rehabilitation facility during a business divorce eventually resolved by a sale to a white knight and negotiated the put-call arrangement with the venture firm to maximize capital gains, minimize ordinary income and increase the client's total return.

  • Lead counsel for the taxpayer in a multimillion dollar employment tax case involving whether certain workers were employees or independent contractors. Smokey Mountain Secrets, Inc. v. U.S., 76 AFTR 2d 95-6974 (D.C. Tn. 1995).

  • Organized and structured the Community Reuse Organization East Tennessee and its various single-member LLCs.

  • Active in structuring the planned gift of $25M for a community foundation.

Partner | Atlanta, GA , Nashville, TN

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Services

Business & Succession Planning Corporate Employee Benefits & Executive Compensation Executive Compensation Tax Law Trusts & Estates Planning Family Law

Jim is a Partner in the Firm's Tax, Trusts and Estates and Corporate practice groups, where his practice is best described as a general tax practice. Jim works with a broad spectrum of clients, including start-up businesses, mid-market family businesses, publicly traded entities, and retired corporate executives and business owners.

His practice encompasses the entire range of tax planning, including, mergers and acquisitions, structuring and forming start-up businesses, asset protection, family business planning and estates, trusts and wealth preservation. In addition to his transactional planning practice, Jim is active in representing clients during audits by the IRS and/or states Department of Revenue. Finally, as the parent of a young adult on the autism spectrum, Jim is very involved in special needs planning for clients who have family members with a disability.

Jim is a Fellow in the American College of Trust and Estate Counsel and has a broad range of tax experience including: representing clients during audits by the IRS and/or Tennessee Department of Revenue, crafting tax structures for new businesses, counseling clients on the tax aspects of business exit strategies and business succession issues, designing tax-effective executive compensation packages, creating appropriate estate plans, and counseling families on special needs planning.

Jim began his professional tax career with the “Big 8” public accounting firm of Coopers & Lybrand. Following law school, he litigated tax cases for the federal government as a member of the U.S. Department of Justice. In 1994, Jim was a founding member of one of East Tennessee’s largest and most respected law firms.

Jim is the author of a professional treatise and numerous tax-related articles as well as a frequent speaker at tax programs for CPAs and attorneys throughout the Southeast. He is also a contributing author to Burr’s “Succeeding in Succession” blog.

Jim was honored for his work in special needs planning when inducted into the Special Needs Alliance. He and his wife, Diane, are both active with ASMT (Middle Tennessee’s autism support organization), the ARC of Davidson County and the Treatment and Research Institute for Autism Spectrum Disorders (“TRIAD”) program, part of Vanderbilt’s Kennedy Center.

 

 

Selected Publications

  • Health Care Worker Classification, BNA’s Health Law & Business, Portfolio No. 2700 (1999)
  • Protecting Your Clients Against Reclassification of Independent Contractors, Tennessee CPA, May, 1996
  • Presumed Guilty: IRS Scrutinizes Return Prepares, Tennessee CPA, December, 1995
  • LLC Choices Offer Many Paths, Tennessee CPA, June, 1994
  • Compliance Tougher After RRA, The Practical Accountant, November 1993
  • Avoiding Penalties When There Is A Disclosure Dispute, Taxation for Lawyers, January/February 1993
  • Helping Your Clients Jump Back Into The Tax System Safely, Tennessee CPA, November 1992
  • Avoiding Exposure to Civil and Criminal Penalties as an In-House Tax Preparer, Corporate Controller, March/April 1992
  • Aggressive Positions on Estate and Gift Tax Returns: Which Penalties Apply, The Journal of Taxation of Estates & Trusts, Spring 1992
  • Challenging Regulations: The IRS Ups the Ante with New Penalty Rules, Corporate Taxation, July/August 1991
  • Making the IRS “Do the Right Thing”: Due Diligence Through Attorney’s Fee Awards, Corporate Taxation, March/April 1991
  • Technical Services Personnel: The Costly Employee/Independent Contractor Question, Banking Law Review, Fall 1990
  • Aggressive Return Positions: The Disclosure Decision, Corporate Taxation, September/October 1990
  • Higher Return Position Standards Increase Practitioner’s Burden, Corporate Taxation, November/December 1990
  • Technical Services Personnel: The Costly Employee/Independent Contractor Question, The Journal of Bank Taxation, Spring 1990
  • Ensuring That the Bank Does Not Become the Guarantor of a Customer’s Tax Liability, The Journal of Bank Taxation, Fall 1989
  • IRS Collections After the Taxpayer Bill of Rights: Has Anything Really Changed?, Corporate Taxation, July/August 1989
  • Commissioner’s Penalty Study Proposal Would Once Again Shift Practitioner’s Standards of Conduct, Corporate Taxation, May/June 1989

 

Selected Speaking Engagements

  • “The New Medicaid Surtax,” Financial Planning Association, Knoxville, Tennessee (September 2013)
  • “Doing Well By Doing Good: Combining Special Needs and Charitable Planning,” National Alliance on Mental Illness (NAMI), National Convention, Seattle, Washington (June 2012)
  • “Unraveling The Mystery Of Conservatorships & Special Needs Trusts,” Tennessee Disability Mega conference, Nashville, Tennessee (June 2012)
  • “A Bike For Bobby, A Concert For Cathy: Unintended Consequences For Fundraisers and Their Beneficiaries,” Special Needs Alliance, Spring Meeting, Phoenix, Arizona (March 2012)
  • “Special Children, Special Lives, Special Needs, Special Planning,” 2012 Northeast GA Transition Expo and Conference, Athens, Georgia (February 2012)
  • “6,000 Audits And More: An Overview of Important Developments in Employment Taxes and Reporting Requirements,”Tennessee Federal Tax Conference, Franklin, Tennessee (November 2011)
  • “Business Succession Planning: Part ‘Art,’ Part ‘Science,'” Tennessee Probate & Estate Planning Conference (M. Lee Smith Sponsor), Nashville, Tennessee (October 2011)
  • “Special Children, Special Lives, Special Needs, Special Planning,” East Tennessee Financial Planners Association Symposium, Knoxville, Tennessee (September 2011
  • “Keeping Current: Recent Developments of Interest for Tax Practitioner,” Upper Cumberland of the Tennessee Society of CPAs, Cookeville, Tennessee (September, 2011)
  • “The 2010 Tax Relief Act: Estate Tax Certainty and More. . .(Well, Certainly for Two (2) Years Anyway) or An Introduction to Successfully Navigating 2010’s Tax Changes,”Woodbury Financial Services, LLC Regional Sales Meeting, Franklin, Tennessee (February 2011)
  • “Business Succession Planning: Part ‘Art,’ Part ‘Science'”:Integrating the Documents and the Plan, Murfeesboro Estate Planning Council, Murfeesboro, Tennessee (August 2010)
  • “Bear Market Comparison:   An Update on New Deferred Compensation Tax Rules and Other Limitations.” Tennessee Federal Tax Conference, Franklin, Tennessee (November 2010)
  • “Getting Out In Front of the Competition (AND THE 2013 TAX INCREASES): Planning to Avoid the New Medicare Tax on Passive Income.” Woodbury Financial Services, LLC, Regional Sales Meeting, Atlanta, Georgia (September 2010)
  • “An Introduction to Financial Planning for Families With Special Needs,” UBS Financial Services Regional Sales Meeting, Nashville, Tennessee (February 2010)
  • “The Art and Science of Business Succession: Integrating the Documents and the Plan.” American Association of Attorney-Certified Public Accountants Annual Convention, Nashville, Tennessee (November 2009)
  • Business Succession Planning – Part “Art” Part “Science.” Tennessee Society of CPAs Trucking Conference, Nashville, Tennessee (October 2009)
  • “The 409A Two Minute Drill – What’s Your Compliance Strategy?” Alabama Federal Tax Clinic, Alabama (November 2008)
  • “Divorce, The IRS, and You!” Nashville Divorce Summit for Women, Nashville, Tennessee (September 2008)
  • “The New Return Preparer Penalty and Estate Planners: What is more likely than not and what are the consequences when the standard is not met?” American College of Trust and Estate Counsel Southern Regional Meeting, Perdio Beach, Alabama (April 2008)
  • “The Application of the New Return Preparer Penalty Standards to Estate Planners:  What is more likely than not and what are the consequences when the standard is not met?” The Tennessee Bar Association’s Estate Planning Forum, Nashville, Tennessee (February 2008)
  • “Deferred Compensation — The Times, They Are A Changin’ – New Rules Hit Nonqualified Deferred Compensation Arrangements (Final Regulations Are Out!).” Libscomp University Twenty-Seventh Annual Tax & Accounting Seminar, Nashville, Tennessee (December 2007)
  • “409A Turns Three — Some Obvious and Some Obscure Implications Under the Final Regulations.”
    The Tennessee Federal Tax Conference, Franklin, Tennessee (December 2007)
  • “Comparative Ethis v. Audit Ethics Reprised — Old Practices and Old Tactics Meet New Rules.” The Tennessee Federal Tax Conference, Franklin, Tennessee (December 2007)
  • “Missing Out On Easy Money: Clients and The Production Activity Deduction’s Requirements (New Section 199).” Tennessee Federal Tax Institute, Nashville, Tennessee (November 2006)
  • “Tax News You Can Use or What We Don’t Know Will Hurt Our Clients.” Tennessee Bar Association General Practice Summit (TennBarU), Nashville, Tennessee (August 2006)
  • “Have You Heard Us Yet?!! The IRS and Its New Circular 230 Ethical Standards.” Tennessee Bar Association Annual Convention, Memphis, Tennessee (June 2006)
  • “Comparative Ethics III: Giving the Closely-Held Client and Its Owners Your Best (Without Getting Sued).” Tennessee Federal Tax Institute, Nashville, Tennessee (November 2005)
  • “One Practitioner’s View of Circular 230: What, Me Worry?” Chattanooga Tax Practitioners, Chattanooga, Tennessee (October 2005)
  • “An Overview of Tennessee Tax Procedure.” Tennessee Society of CPAs SALT Conference, Nashville, Tennessee (August 2005)
  • “Whole Lotta Shakin’ Goin On…” New Rules Hit Non-Qualified Deferred Compensation Arrangements.
    Chattanooga Tax Practitioners, Chattanooga, Tennessee (March 2005)
  • “Tennessee’s Uniform Trust Code.” Tri-Cities Estate Planning Council, Kingsport, Tennessee (October 2004)
  • “Innovative Tax Planning For Small Businesses – Corporations, Partnerships and LLC’s.” North Carolina Society of CPAs, Wilmington, North Carolina (June 2004)
  • “Financial and Tax Planning For High Income Clients.” North Carolina Society of CPAs, Wilmington, North Carolina (May 2004)
  • “The 3 P’s, Post, Sarbanes-Oxley: Public or Private Companies and the Privilege; Does it Still Exist?” Tennessee Bar Association Corporate Counsel Meeting, Knoxville, Tennessee (May 2004)
  • “Business Succession Planning – A Case Study.” East Tennessee Financial Planners Association Symposium, Knoxville, Tennessee (May 2004)