Lillian Mills
Professor, Department of Accounting | The University of Texas at Austin, McCombs School of Business
Austin, TX, UNITED STATES
Former PwC senior manager with expertise in tax compliance, effective tax rates, and income tax issues
Areas of Expertise (8)
Effective Tax Rates
Earnings Management
Tax Law
International Taxation
Financial Reporting
Accounting Regulation and Liability
Financial Accounting and Audits
Capital Structure and Taxation
Biography
Lillian Mills is a professor in the accounting department, previously the chair of the department, and holds the Beverly H. and William P. O’Hara Endowed Chair in Business. Her expertise includes international tax policy, corporate tax structure, and financial statement disclosures as they pertain to tax liability and reporting.
Mills began her career as a tax supervisor and senior manager at PricewaterhouseCoopers before pursing a Ph.D. in accounting and serving as a consultant to the IRS to develop Schedule M-3 (Form 1120) for large and international businesses. She then served as a Stanley Surrey Senior Research Fellow at the Office of Tax Analysis for the U.S. Department of Treasury and was later appointed to the IRS’ Information Reporting Program Advisory Committee as a member of the Tax Gap Measurement subcommittee.
In 2006, Mills joined the McCombs faculty where she now oversees the #1-ranked accounting department in the nation.
Mills' research has been featured in premier refereed journals, and she's been the recipient of numerous teaching and research awards, most notably the American Association Deloitte Wildman Medal for research that has made or is likely to make the most significant contribution to the advancement of the accounting practice.
For a full list of Dr. Mills' working papers and publications, please view her CV: http://goo.gl/2y6FQr
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Education (3)
University of Michigan: Ph.D., Accounting 1996
University of Florida: M.S., Accounting 1981
University of Florida: B.S., Accounting 1980
Media Appearances (6)
Companies Near the IRS Face a Higher Risk of Audit
Accounting Today online
2017-03-21
The study, by Profs. Thomas Kubick of the University of Kansas, G. Brandon Lockhart of Clemson University, Lillian Mills of the University of Texas at Austin, and John Robinson of Texas A&M University, examined “how the information environment, reflected by the proximity between corporate headquarters and IRS supervision, affects both tax avoidance and IRS enforcement.”
Study Debunks Tax Repatriation Holiday Claims
Accounting Today online
2011-12-13
A new study has cast doubt on claims from legislators and lobbyists that a tax holiday for multinational corporations on their repatriated foreign earnings would spark an economic revival in the U.S.
Open Letter to IRS Commissioner
American Taxation Association online
2010-02-21
Lillian Mills, as president of the ATA, writes to IRS Commissioner Doug Shulman to offer her condolences for the tragic death of IRS employee Vernon Hunter in Austin, Texas, and underscore the ATA's commitment to educating future generations of tax enforcement professionals.
How Wall Street’s short-term focus can bring you long-term stock gains
MSN online
2018-06-21
I base my skepticism on an academic study published several years ago in the prestigious Journal of Financial Economics: “The Evolution of Capital Structure and Operating Performance after Leveraged Buyouts: Evidence from U.S. Corporate Tax Returns,” by Jonathan Cohn and Lillian Mills, both from the University of Texas at Austin, and Erin Towery of the University of Georgia.
Study: Tax Avoidance, Tax Audits Both Increase Based on Proximity to an IRS Office
NYSSCPA online
2017-03-22
A recent study has found that the closer a public company is to an IRS office, the more likely it is that it will be audited by the IRS, though this could be because, according to the study, these companies also engage in higher levels of tax avoidance activity, according to Accounting Today. The study, IRS and corporate taxpayer effects of geographic proximity, appears in the Journal of Accounting and Economics.
Does Proximity to an IRS Office Increase Audit Risk?
Accounting Web
2017-04-11
The study of public company tax records from fiscal years 1996 to 2012 was published recently in the Journal of Accounting and Economics. The authors are Thomas Kubick, assistant accounting professor at the University of Kansas; Brandon Lockhart, assistant finance professor at Clemson University; Lillian Mills, business professor at the University of Texas; and John Robinson, agricultural economics professor at Texas A&M University.
Style
Articles (7)
Forecasting Taxes: New Evidence from Analysts
The Accounting Review
2017-05-01
We provide new evidence about how analysts incorporate and improve on management ETR forecasts. ...Our comprehensive analysis reveals that analysts deviate from management more and are more accurate relative to management as complexity increases, with real effects on EPS accuracy and dispersion.
Military Experience and Corporate Tax Avoidance
Review of Accounting Studies
2017-03-01
We find that managers with military experience pursue less tax avoidance than other managers and pay an estimated $1–$2 million more in corporate taxes per firm-year. These managers also undertake less aggressive tax planning strategies with smaller tax reserves and fewer tax havens.
Taxes and Financial Constraints: Evidence from Linguistic Cues
Journal of Accounting Research
2015-03-01
Using a new measure of financial constraints based on firms’ qualitative disclosures, we find that financially constrained firms—firms that use more negative words in their annual reports—pursue more aggressive tax planning strategies.
The Effect of Mandatory Financial Statement Disclosures on Tax Reporting and Collections: The Case of FIN 48 and Multistate Tax Avoidance
Journal of the American Taxation Association
2014-10-01
This study investigates the effect of accounting measurement and disclosure requirements on multistate income tax avoidance. We find that state taxes contribute substantially to reserves for uncertain tax positions. We further find that both firm-level state income tax expense and aggregate state-level income tax collections increased surrounding adoption of FIN48, providing first-time evidence of the association between mandatory financial reporting disclosures and tax compliance behavior.
The Evolution of Capital Structure, Operating Performance, and Organizational Form After Leveraged Buyouts: Evidence from U.S. Corporate Tax Returns
Journal of Financial Economics
2013-11-22
This study uses corporate tax return data to examine the evolution of firms' financial structure and performance after leveraged buyouts (LBOs) for a comprehensive sample of 317 LBOs taking place between 1995 and 2007. We find little evidence of operating improvements subsequent to an LBO, although consistent with prior studies, we do observe operating improvements in the set of LBO firms that have public financial statements. We also find that firms do not reduce leverage after LBOs, even if they generate excess cash flow. Our results suggest that effecting a sustained change in capital structure is a conscious objective of the LBO structure.
The Effect of Political Sensitivity and Bargaining Power on Taxes: Evidence from Federal Contractors
The Accounting Review
2013-05-01
We investigate whether politically sensitive contractors pay higher taxes and whether their bargaining power reduces these tax costs. Our study provides new evidence on the political cost hypothesis in a tax setting and the first evidence of the interactive effects of a firm's political sensitivity and bargaining power on tax-related political costs.
Do Auditor-Provided Tax Services Improve the Accuracy of Tax Expense?
Contemporary Accounting Research
2011-05-02
We examine whether auditor-provided tax services (ATS) improve the quality of financial reporting via knowledge spillover. Concerns about auditor independence prompted regulators to restrict auditor-provided nonaudit services. Despite the general failure of researchers to document a decrease in financial reporting quality associated with nonaudit services, ATS declined after the Sarbanes-Oxley Act, even though many such services are still permissible with audit committee approval. We investigate tax reserves recorded for tax disputes, a setting where ATS could either improve the audit through knowledge spillover or impair independence.
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