David R. Henderson  

Has Arizona State University Been Audited?

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A year ago, in his commencement address at Arizona State University, President Obama engaged in a little gallows humor. After ASU had decided not to give him an honorary degree, Obama joked about payback (at about the 1:17 point) for that slight, saying:

President Crow and the Board of Regents will soon learn about being audited by the IRS.

Of course, my working assumption is that he just told a joke in bad taste, similar to his threatening to use Predator drones on the Jonas brothers if they go after his daughters. But I don't know the guy and he is, after all, the most powerful man in the world and, it's apparent, someone who does not take well to criticism. So I'm wondering: has ASU been audited since his joke? And how would one find out? Also, have any reporters been willing to inquire around and find out if there has been an audit? Richard Nixon used the IRS to go after political enemies as did President Kennedy. After Nixon was "caught," the president's power to order such audits was reined in by Congress. But if a president jokes publicly about such things, there's nothing stopping individual auditors at the IRS from going after the entity threatened, with no direct communication from the president.

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COMMENTS (22 to date)
Steve writes:

I'm not sure about large non-profits, but I know that every large for-profit company is audited every year. It would not surprise me if an institution as large as ASU is audited every year by the IRS anyway. If that's the case, then the question to ask is: was a recent audit significantly more painful than most?

Boonton writes:

During the Clinton years it was a common cliche on the right that his 'enemies' were subjected to IRS audits. There is, however, an easy way to judge such statements. If you are audited (or are not), the IRS cannot discuss your case with anyone....not even Congressional investigators...since that's a violation of your privacy. If, however, you sign a waiver the IRS can discuss your case including why you were audited. If someone claims they were abusively audited see if they are willing to let the IRS discuss their case publicly. If not I'd say its safe to assume they are not giving you the whole story.

I don't know if the privacy regulations applies to companies and institutions but I suspect it does.

John Jenkins writes:


Are you sure you're not mistaking the annual audit done by a firm's outside accountants for reporting to the SEC with an IRS audit? The IRS doesn't have the manpower to audit the tax returns of every large for profit company every year (depending, I suppose, on how you define "large").

Steve writes:


I work in the tax department of a large company that is audited by both our outside accountants and the IRS for every single year. I'm not sure how large we are relative to ASU, but I am under the impression that every company that is our size or larger has every single tax return audited by the IRS (our shareholder equity/surplus is in the neighborhood of $10 billion).

Perhaps nonprofits are less likely to be audited. I don't know.

spencer writes:

[... rudeness deleted--Econlib Ed.]

Why would I not be surprised if you delete this comment. But I do not see anything more improper about my wondering about you as you do about Obama.

[Spencer, you bet I deleted it. Not Henderson, me. There is nothing wrong with your questioning Henderson's attitudes to Obama. But if you do it in that rude a manner, it's going to get you banned. You know how to reach us if you want us to consider restoring your comment privileges. You've been warned before.--Econlib Ed.]

tim writes:

Larger organizations already have a two way relationship with the IRS. The last large organization I worked at even had two offices labeled "IRS" for the government employees who arrived every year.

I wonder why do you care? So you consider the joke in bad taste (I didn't consider the Johan joke in bad taste - I actually quite enjoyed it). What is your purpose in asking the question?

Robert writes:

I think Dave's post is an interesting query in the abstract - who watches the watchmen? How would we know whether an audit was politically motivated? That's an interesting topic.

I also think Econlib Ed was correct to edit spencer's post; rudeness adds nothing to the conversation.

Of course, my working assumption is that Ed has good intentions and is simply keeping the comments section courteous. I'm assuming the same for Dave. But I don't know those guys or any of the other moderators and they are, after all, the people who control the comments on Econlog.

So I'm wondering: have any other commenters beside spencer been banned since this post? And how would one find out? Also, have any commenters been willing to inquire around and find out if there has been mass bannings? I have certainly heard of other economic bloggers who censor their blog comments.

Of course, I don't think Dave would ever tell the moderators to censor opposing views. But if Dave consistently posts criticisms of statists, there's nothing stopping individual moderators at Econlog from going after such people, with no direct communication from Dave.


[Hi, Robert. I haven't banned anyone else in several days, and no one else with regard to this post. In general, I email the person to try to talk it out--which is the main reason we require email addresses. In spencer's case, he's been emailed many times in the past. I also almost always replace offending comments with a warning message, in part to let other commenters gauge the question of how many and for what people get banned. We do not remove comments without one or both of those actions unless they are spam. We have a lot of discussion of these matters in the links available in the Comments FAQ.--Econlib Editor, whose name is actually Lauren Landsburg.]

As a former ASU employee, I can assure you that the university OUGHT to be audited. The irregularities are amazing.

At one point I went five months without a correct paycheck; I was told (after 14 years in the saddle) that I was ineligible for vacation time; my contribution and/or the university's to the 403(b) was missed several times; two of my subordinates were double-paid; my assistant's pension contributions went unpaid for six months and then they confiscated an entire paycheck to cover the missing contributions. That year my W-2 was inaccurate; we were told that we had to figure out what was supposed to appear on the form and report to HR (where you cannot rouse a human being) if it was wrong. My lawyer told me it's the employer's responsibility to get W-2 reporting right, so I just let it lay.

It's hard to tell whether they're crooked or incompetent...but it's worth noting that the errors very rarely redound to the employee's benefit.

Robert writes:

I don't condone spencer's rudeness (which I didn't see), and I know there are several ways in which my tiny analogy (I wrote another post which may not be allowed) breaks down. Just assume I was doing some mental exercise.

On the other hand, from my perspective, I think Dave's post makes sense only if you assume conspiracy and incredibly bad intentions. People on the left would find Dave's hypothetical unlikely, to say the least. So I hope that helps explain spencer's general reaction.

David R. Henderson writes:

tim writes:
I wonder why do you care? So you consider the joke in bad taste (I didn't consider the Johan [sic] joke in bad taste - I actually quite enjoyed it). What is your purpose in asking the question?

My answer is that I care because I don't like seeing government officials abuse their arbitrary power. The more people like me there are asking these questions on blogs, the less likely they are to get away with abusing their power. They might still abuse their power, but at least there's some publicity about it. That gets to his second question. The reason I asked is that I'm wondering, one year later, whether anyone has looked into it.

Doc Merlin writes:

Arizona state isn't a non profit. Its quite literally part of the state government. Like most state universities, anyone working for them is a state employee. I'm would doubt that the IRS can audit the states without their permission.

Yancey Ward writes:

I think it safe to assume it was indeed just a joke, however, having observed him closely for 3 years, Obama is thin-skinned, but, then, so are a lot of powerful men and women.

Yancey Ward writes:

And, having run into Lauren's editting a couple of times myself, she is fair, and she does contact you with e-mails explaining her decisions, and I could see her point both times.

Robert writes:

Thanks for the note, Lauren. Just so it's clear, I think the possibility of comment censorship here is about as likely as my dog initiating a conversation about string theory.

David R. Henderson writes:

I don't know about your dog, but when I was a Math major in college--in Canada we called it "university"--I was intimidated by string theory. :-)

shecky writes:

Does Obama really seem all that thin skinned to you? He seems to take his criticism in stride, probably because most of his criticism is of an absolutely loony nature.

I dunno. I'm sensing a lot more projection in this thread than not.

SydB writes:

I'm with Shecky here. I'd love to here examples of how Obama is thin skinned. Now George Bush was thin skinned. There are countless examples, including the time he verbally abused a journalist in front of the journalist's children at a restaurant because an article had not presented Bush Sr in a good light.

George Bush could not take criticism.

Since Mr Henderson has indicated that Obama has a thin skin, I'd like him to provide a few examples.

Consider me baffled.

Yancey Ward writes:

Not projection at all. Rather than list all the examples I could give you that I have seen, just type "Obama's thin skin" into Google- other people have already documented many of those examples. His most ardent supporters are even worse (though a lack of humor amongst acolytes is not surprising either). There is always a nasty edge to the humor and counter-criticism he directs at his opponents.

SydB writes:

Yancey Ward: You are amusing. Sort of like McCarthy and his "list of names." Instead of providing an example you simply say "oh, just google it" as if that's an answer.

I provided a very specific case in which George W Bush angrily, loudly, and in a foul mouthed way confronted a journalist sitting in a restaurant eating dinner with his children. Bush was obviously out of control. That's one example. I can provide more.

And do note: A thin skinned person is not just one who engages in dialog with those they oppose. Nor one who is want to play a few ironic verbal games with the opposition. A thin skinned person gets angry and then tries to get even. That describes George W Bush perfectly.

So come one: A few examples.

PS: "Just google it" should be put into the category of "my dog ate my homework" as an automatic non-response.

Tom writes:

SydB: Funny you have a problem with google being that I just googled :"george bush confronted a journalist sitting in a restaurant" and could find nothing on the incident you mentioned.

Maybe Yancey's method works better. His recollections do seem to be more accurate.

SydB writes:



There is a difference between the ability to use google and actual knowledge or understanding of the world.

By the way: I'm still waiting for the examples. Mr Henderson hasn't provided one. Yancy hasn't. And neither have you.

BTW: Next time you guys are at a job interview and say "I don't know the answer to your question but I could probably google it" just remember one thing: Anyone can say that.

Charlie writes:

I'm not sure why you think this is apparent, but I hope you aren't using this speech as support of your position, because if you actually read the speech, the evidence runs very strongly the other way.

(Obama's next words after audit joke)
"In all seriousness, I come here not to dispute the suggestion that I haven't yet achieved enough in my life. I come to embrace it; to heartily concur; to affirm that one's title, even a title like President, says very little about how well one's life has been led - and that no matter how much you've done, or how successful you've been, there's always more to do, more to learn, more to achieve."


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