Paul G. Marcotte, Jr.
(301) 654-0165 fax
Paul G. Marcotte, Jr. Co-Chairs the firm’s Tax practice group and is a member of its Estate Planning, Estate & Trust Administration, Nonprofit, Commercial Transactions and Mergers & Acquisitions groups, among others. He concentrates on federal, state and international tax matters (both planning and controversy), estate and wealth preservation planning, probate and trust administration, nonprofit organizations, business counseling and succession planning, business sales, acquisitions and reorganizations, and executive compensation.
A significant part of Mr. Marcotte’s estate planning practice focuses on unique estate planning considerations for multinationals including staff at various international organizations with headquarters in the Washington, D.C. metropolitan area such as the World Bank and the International Monetary Fund, diplomatic personnel as well as business executives on assignment here from overseas employers. Mr. Marcotte works with these individuals to educate them as to basic legal and tax rules that apply in their special circumstances and help them navigate through an often highly complex and intricate maze of specialized tax rules. Mr. Marcotte over the years has worked with clients from all over the globe that have come to the U.S. with their own unique backgrounds and culture unaccustomed to such complexity and tax exposure. Mr. Marcotte also works with foreign professionals engaged by such individuals to coordinate the global planning for clients whose interests span multiple jurisdictions.
Mr. Marcotte’s international tax practice also includes advising a wide spectrum of clients on cross border investment matters and international tax compliance. He counsels multinationals on the structuring of foreign investment in U.S. real estate or establishing new business ventures or subsidiaries in this country with a view to minimizing the potential impact of U.S. income taxation on the profits/gains from such activity and limiting exposure to U.S. wealth transfer taxes. The converse involves assisting U.S clients (including dual nationals) that hold interests in offshore entities subject to some rather complex and onerous tax regimes and enhanced reporting requirements including foreign trusts, controlled foreign corporations and passive foreign investment companies where penalties for non-compliance can be quite severe. He also advises on more complex international matters including expatriation planning and migrating offshore structures onshore to avoid the need for continuing reporting of such holdings and undue tax exposure by U.S. beneficiaries.
From an estate planning perspective, Mr. Marcotte designs sophisticated strategies for high net worth clients, including successful business entrepreneurs and real estate investors. He minimizes the adverse impact of federal wealth transfer taxes and preserves and perpetuates family wealth for future generations using the latest planning techniques including such strategies as dynasty or perpetual trusts, family partnerships, sales to intentionally defective trusts and valuation discounts.
In addition to planning and compliance matters, Mr. Marcotte represents both individuals, estate and trust fiduciaries and business organizations before the Internal Revenue Service and state and local tax authorities in conjunction with a broad spectrum of tax controversy matters such as taxpayer examinations, non-compliant taxpayers including non-filers, penalty assessments and requests for abatement, IRS Appeals and other tax controversy proceedings including litigation before the U.S. Tax Court. He has helped many clients with undisclosed offshore accounts and other holdings come forward by making a voluntary disclosure to the IRS under various offshore voluntary compliance programs with the expectation of avoiding some of the harsher penalties that can be imposed for non-compliant taxpayers. He also counsels clients as to when less formal alternatives to a full voluntary disclosure are available with reduced penalty exposure. He also works with clients in establishing tax-exempt organizations including private foundations and those with overseas operations where extra oversight over foreign grant making is required.
Mr. Marcotte’s practice also involves acting as corporate or outside counsel to various small and mid-sized business organizations, both corporate and unincorporated. He counsels them on a wide variety of matters, including new business start-ups, real estate investments, the structure and completion of business acquisitions, divestitures, mergers and reorganizations, corporate buy-sell agreements, employment matters and structuring executive deferred compensation and stock option plans. He also provides business succession planning for owners of closely held businesses and real estate entrepreneurs –an area often inextricably linked to his estate planning practice – and counsels executives on special tax aspects/planning for executive compensation including non-qualified stock options and incentive stock option issues.
Over his 30 years in practice, Mr. Marcotte has been directly involved in some major merger and acquisition transactions, including two acquisitions in recent years by Fortune 500 companies of closely held businesses which were clients of the firm and which involved rather complex federal and multistate tax issues. Those transactions involved consideration exceeding $250 million in each case.
A frequent speaker to various professional organizations and a published writer who contributes articles to legal publications on selected tax and estate planning topics, Mr. Marcotte has been quoted in The Washington Post and other local media outlets on significant tax developments.
Mr. Marcotte has served as a part-time instructor, teaching various tax courses for paralegal studies at area universities, and has been a guest lecturer at local law schools. Prior to starting his legal career, he worked as a Certified Public Accountant for an accounting firm in Silver Spring, Md.
After earning his B.S. degree in Accounting – and membership in the Beta Alpha Psi accounting fraternity – as well as a Masters in Business Administration (with a concentration in international finance) from the University of Maryland, Mr. Marcotte received his J.D. from the University of Baltimore. It was there that he received the American Jurisprudence Award for Study of Agency & Partnerships before earning a Master of Laws in Taxation from Georgetown University Law Center. He is admitted to the bar in Maryland and the District of Columbia, is a member of the American Bar Association, State of Maryland and District of Columbia Bar Associations, and belongs to the Tax, Estates and Trust, Business and International Law Sections of several of these organizations.
Mr. Marcotte is a member of STEP (Society of Trust and Estate Practitioners), an international group of experienced and senior professionals in the field of trusts and estates.
He has recently been elected to become the Chair-Elect of the Section of Taxation of the Maryland State Bar Association, the governing body of the section that sets its overall policy and is responsible for giving testimony on proposed legislation and regulatory developments impacting the general public as well as tax practitioners.
LL.M. in Taxation, Georgetown University Law Center, 1983
J.D., Recipient, American Jurisprudence Award for Study of Agency & Partnerships, University of Baltimore School of Law, 1981
M.B.A., University of Maryland, 1981
B.S., University of Maryland, 1976
“IRS Winning Game of Offshore Hide and Seek” Maryland Bar Journal, May 2013
“Reducing the Pain: IRS Penalty Mitigation and Procedure“ Maryland Bar Journal (Co-Author), May 2013
“Planning for U.S. Persons Inheriting Offshore Trust Structures” Journal of International Taxation, July 2010.
“Mon Dieu! Your Client is Now the Beneficiary of an Offshore Trust,” Maryland Bar Journal, September/October 2009.
“Estate Planning for Real Estate” presented at MICPEL Advanced Estate Planning Institute (Co-Author), May 2008.
“Tax Legislation Offers Small Business Incentives,” Business Gazette, Dec. 17, 2004.
“Keeping 2036 Out of It” case note in Trusts and Estates (January 2004), a leading publication in the field of estate planning, on a judicial decision involving family partnerships in the context of the federal estate tax laws.
“Section 482: Reallocation of Personal Service Corporation Income to Shareholders,” 12 University of Baltimore Law Review 40, 1982.
“After the FBAR,” Maryland State Bar Association Taxation Section – Montgomery County/Prince George’s County Tax Study Group, January 2012.
“Advising Clients Seeking to Come in From the Cold; IRS Voluntary Disclosure Basics,” Maryland State Bar Section of Taxation Webinar, October 2011 (Moderator and Panelist).
“Employment Tax Examination Basics,” Maryland State Bar Section of Taxation Webinar, April, 2011 (Moderator).
“Roth Conversions,” Maryland State Bar Section of Taxation Webinar, April, 2010 (Moderator).
“Estate Planning for French Nationals Working/Residing in the United States,” L’Association Démocratique des Français à l’Etranger (presented at Embassy of France in Washington, D.C.), November 2006.
“Planning for Family Partnerships in Aftermath of Strangi III,” Montgomery County Bar Association Trusts and Estate Section, October 2003.