When Not to Run a University Like a Business

By Harry Lewis. A friend of mine recently explained over dinner with some friends that a university has to be run like a business, but not too much like a business. He's right, and the fiasco about Harvard misreporting employee earnings to the IRS is a perfect example.
The Globe ran the story on February 8. The university had long made available a certain benefit to employees, which the IRS considered taxable. So the value of the benefit would show as income on employees' W-2 forms. So far, nothing unusual. Through some combination of changes in tax regulations and changes in the benefit program, the benefit ceased to be taxable in the eyes of the IRS in 2009. But Harvard, mistakenly, continued report its value as income on employees' W-2s. Unfortunate, and costly to employees, because they had to pay taxes on what should have been nontaxable benefits. And now they have to amend their returns, perhaps several years of returns, if they want to get their money back from Uncle Sam. More...