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Stephanie is a PhD candidate in Accounting. Her research interests include taxation, financial accounting, managerial reporting incentives, and institutional investors. Stephanie is a Deloitte and Touche Foundation Doctoral Fellow and a AAA/Deloitte/J. Michael Cook Doctoral Consortium Fellow.
Her teaching interests include taxes and business strategy and financial accounting and reporting. The Department of Accounting nominated her for The University of Texas Fred Moore Assistant Instructor Award for Teaching Excellence after she taught Fundamentals of Financial Accounting.
Stephanie is a Certified Public Accountant in the state of Texas. Prior to entering the PhD program, she was a senior associate in federal business tax consulting at Arthur Andersen L.L.P. As an undergraduate student, she interned at the National Tax Office of Deloitte and Touche L.L.P. Stephanie graduated with honors from Tulane University where her undergraduate major was political economy. Stephanie is also a graduate of the Masters in Business Administration program at Tulane University’s A.B. Freeman School of Business.
Her current research includes the following:
PUBLICATIONS
"What Can We Learn about Uncertain Tax Benefits from FIN 48?" with Jennifer Blouin, Cristi Gleason, and Lillian Mills. National Tax Journal 60 No. 3 (September, 2007): 521-535.
FIN 48, Accounting for Uncertainty in Income Taxes, standardizes accounting for uncertain tax benefits and requires companies to disclose their tax reserve amounts. We summarize hand-collected disclosures related to tax reserves from 2005 through the first quarter of 2007. For the largest 100 non-financial, non-regulated firms, the reserve at adoption on January 1, 2007 is $78 billion excluding interest, or about two percent of assets. Of this $78 billion, an estimated $58 billion would affect earnings if ever released.
WORKING PAPERS
“Changes in Tax Reserves in Anticipation of FIN 48” with Jennifer Blouin, Cristi Gleason, and Lillian Mills (under first round review at The Accounting Review )
FIN 48, Accounting for Uncertainty in Income Taxes, introduces new disclosure and computational requirements that reduce discretion in estimating tax reserves. FIN 48’s adoption rule requires firms to record cumulative effect adjustments in stockholders’ equity rather than through earnings. We predict that over-reserved firms will decrease their tax reserves in advance of adoption because such releases will enhance earnings and potentially decrease visibility to the IRS. We analyze 2006 and 2007 disclosures for 200 non-financial, non-utility firms followed by analysts. We find that firms are more likely to decrease reserves in the quarters prior to adopting FIN 48 if they have excess reserves, even controlling for settlements. Our study sheds light on how firms that held excess reserves, either because of conservatism or earnings management, reacted when FIN 48 increased the cost of maintaining excess reserves. Moreover, our results suggest that an unintended consequence of providing equity adjustments for cumulative effect adjustments is that companies will leak beneficial effects into earnings before adoption.
“The Impact of Evaluating the Tax Department as a Profit Center on Effective Tax Rates” with John R. Robinson and Connie D. Weaver (under first round review at The Accounting Review )
We address the determinants and consequences of firms’ evaluation of their tax departments as profit (“contributor to the bottom line”) or cost centers using confidential survey data from 1999 that identifies how a sample of firms evaluates the corporate tax function. Specifically, our primary question is whether the evaluation scheme of the tax department is associated with firms’ effective tax rates. After controlling for endogeneity in the profit/cost center choice, we find that firms that evaluate their tax departments as profit centers have lower effective tax rates. We also investigate the factors associated with the decision to evaluate a tax department as a profit or cost center. We find that the likelihood of evaluating the tax department as a profit center is increasing in firm decentralization characteristics (e.g., the degree of coordination between the tax department and business operations and the size of the firm), and tax planning resources and opportunities. Supplemental analysis shows that the association between evaluating the tax department as a profit center and cash tax savings is weaker, suggesting that the profit center incentive is most effective for financial tax management.
“The January Effect and Investment Advisers: Tax-Loss-Selling or Window-Dressing?”
Prior studies attribute the abnormal pattern of stock returns around year-end (the “January effect”) to individual investors’ tax-loss-selling and to institutional investors’ window-dressing. I examine whether investment advisers (institutional investors with investment discretion of $100 million or more in Section 13(f) securities and fiduciary obligations to act in their clients’ interests) contribute to the January effect via tax-loss-selling (rather than window-dressing). I examine sales of loss stocks by advisers whose clients are high net-worth individuals and whose disclosure practices provide little incentive to window dress, and by advisers whose clients are tax-exempt and whose disclosure practices provide incentives to window dress. I find that abnormally low returns over the last few trading days of December and abnormally high returns over the first few days of January are associated with sales by advisers whose clients are high net-worth individuals, but not with sales by advisers whose clients are tax-exempt. These results suggest that investment advisers contribute to the January effect via tax-loss-selling rather than via window-dressing. Unlike window-dressing, tax-loss-selling is potentially in clients’ best interests.
WORK IN PROGRESS
“Taxes, Investor Sophistication, and the Disposition Effect”
“Investment Advisers’ Response to Holding Period Incentives”
“FIN 48 Evidence of Risky Tax Positions” with Jennifer Blouin, Cristi Gleason, and Lillian Mills
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