Jim Gadwood has a diverse tax practice with specific focuses in federal tax accounting, tax controversy, and transfer pricing advocacy. He regularly assists clients with special industry tax issues—including automotive companies, investor-owned utilities, and investment funds—as well as high-net-worth individuals. Jim has significant expertise representing taxpayers in connection with IRS examinations, conferences with the IRS Independent Office of Appeals, Tax Court litigation, and requests for accounting method changes, technical advice memoranda, advance pricing agreements, and competent authority relief. He is admitted to the U.S. Tax Court where he has docketed and successfully resolved several cases on behalf of his clients. Jim also assists clients in submitting comments to Treasury and the IRS regarding recently enacted legislation, proposed regulations, and other administrative guidance.
Jim has received multiple rankings and recognitions, including from Best Lawyers in America and Legal 500, where clients described Jim as a lawyer that combines "knowledge and ability with outstanding customer service and interpersonal, financial, business, and commercial skills." He has been named a "Rising Star" multiple times by both New York Super Lawyers and Washington, DC Super Lawyers.
Jim regularly counsels clients on federal tax accounting matters, such as the timing of income and expense accruals, deferral of advance payments, long-term contracts subject to Section 460, accounting method changes, and the clear-reflection-of-income doctrine. He is also a co-author of Federal Tax Accounting, a leading tax treatise published by Warren, Gorham, & Lamont.
Jim's representative controversy matters include representing large corporations in IRS examinations, partnerships in examinations conducted under the TEFRA rules and the more recent BBA centralized partnership audit rules, and high-net-worth individuals in audits conducted by the IRS Global High Wealth Industry Group. He has represented taxpayers before the IRS Independent Office of Appeals in the non-docketed, docketed, and early referral contexts. These controversy matters have covered a variety of substantive areas, including debt-versus-equity determinations, management fee waivers, Section 743 basis adjustments, Section 751 gain, extraterritorial income exclusions, and transferee liability.
In the transfer pricing space, Jim's representative matters have involved unilateral and bilateral advance pricing agreements, competent authority requests, intercompany guarantee fees, and cost-sharing arrangements. He is currently working on an advance pricing agreement and competent authority proceeding for a Global Top 10 company and recently concluded one of the few multilateral advance pricing agreements to which the IRS has been a party. In 2021, International Tax Review named Jim a "Rising Star" in Americas Transfer Pricing.
Jim is a member of the American Bar Association Tax Section and served as a co-General Reporter at the 2019 International Fiscal Association Congress in London where he presented a major research paper on global implementation of limitations on interest deductibility following the BEPS Action 4 Report. He also regularly presents at tax conferences hosted by the American Bar Association, Tax Executives Institute, and organizations focused on the public utility industry.
- Experience representing taxpayers in connection with IRS examinations of Section 163(j) interest limitation rules, Section 174 research and experimentation expenditures, the income accrual rules under Section 451(b), and long-term contracts subject to Section 460.
- Advised numerous clients seeking accounting method changes under the automatic and nonautomatic change procedures relating to, among other things, capitalization under Section 263A, depreciation, cost recovery, income and expense recognition, and the clear-reflection-of-income doctrine.
- Provided opinions on a variety of LIFO inventory issues, specified liability losses, and non-deductibility of fines and penalties.
- Obtained a full IRS concession of a cross-border debt-equity issue involving several billion dollars of proposed tax, penalties, and interest.
- Successfully resolved an IRS audit of a cross-border cost sharing arrangement.
- Negotiated settlements of multiple IRS audits involving management fee waivers.
- Used the docketed Appeals process to obtain a no-change stipulated decision in a Tax Court case involving IRS assertions of underreported income and a negotiated settlement in a Tax Court case involving Section 743 basis adjustments.
- Negotiated a multi-year settlement with the IRS after filing a motion for summary judgment in a Tax Court case involving the TEFRA statute of limitation.
- Obtained no-change audit reports in IRS examinations of high-net-worth individuals.
Transfer Pricing Advocacy
- Achieved a multilateral advance pricing agreement with the IRS and multiple non-U.S. tax authorities.
- Concluded bilateral and unilateral advance pricing agreements covering tens of billions of dollars of cross-border transactions.
- Represented US taxpayers seeking competent authority relief in connection with transfer-pricing adjustments initiated by tax authorities in Mexico and Korea.
- The Best Lawyers in America®: Litigation and Controversy - Tax, 2020 - 2023
- International Tax Review: Rising Stars Awards 2021 Americas, Transfer Pricing, 2021
- Washington, DC Super Lawyers®: Rising Star, Tax, 2015 - 2016, 2018 - 2019
- DC Bar Capital Pro Bono Honor Roll, 2018
- Legal 500: Tax: U.S. Taxes: Contentious, 2016 - 2018, 2021 - 2022
- Legal 500: Tax: International Tax, 2017
- New York Super Lawyers®: Rising Star, Tax, 2015 - 2016
- Member, Administrative Practice Committee, Section of Taxation, American Bar Association
- Member, Tax Accounting Committee, Section of Taxation, American Bar Association
- Member, Capital Recovery & Leasing Committee, Section of Taxation, American Bar Association
- District of Columbia
- New York
- Massachusetts (inactive)
- United States Tax Court