Irving uses satire to not only show that characters are morally backwards but also to add humor to the story. For example, Tom’s loveless, hostile marriage to his wife both satirizes the institution of marriage and provides humor in the despicable nature of both characters. In this way, the story becomes simultaneously morally educational and entertaining.
"had done him a kindness...."See in text(Text of the Story)
Demonstrating that there was never any love in his marriage, Tom heartlessly feels better about losing his property because the devil rid him of his wife. Irving uses this moment to again satirize marriage by drawing attention to Tom's behavior and providing dark humor around the event.
"The good people of Boston shook their heads and shrugged their shoulders..."See in text(Text of the Story)
Even though Tom was carried off by the devil in a spectacular way, the Bostonians don't seem to react very strongly to this event. Irving is likely suggesting, through a bit of dark humor and satire, that even in this town of Puritan Christians, dealing with the devil is not altogether an uncommon occurrence and there are many sinful and hypocritical people in this society.
"became a rich and mighty man..."See in text(Text of the Story)
Recall how the buccaneer Absalom Crowninshield was heralded as a respectable and noble man upon his death even though he led a sinful life. It is quite ironic and a little disturbing that this society praises and rewards the actions of people like Tom with wealth and social status. Irving is likely making a satirical commentary on the American obsession with wealth and powerful figures.
"Old Scratch must have had a tough time of it!"..."See in text(Text of the Story)
The fact that Tom's shrewish wife was so vicious with the devil, and the fact that Tom somewhat pities "Old Scratch," shows how Irving not only uses the story to provide moral instruction, but he also believes that by adding humor, literature can be morally instructive and entertaining at the same time.
"He became, therefore, all of a sudden, a violent church-goer...."See in text(Text of the Story)
In his old age, Tom finally fears the devil. However, instead of becoming genuinely remorseful for his sins, Tom becomes a violent church-goer who makes brash displays in church and criticizes others rather than looking after his own sins. In this way, Irving satirizes those who turn to religion and make public shows of devotion while retaining their meanness of spirit. Tom's selfish reasons for becoming a church goer represent the hypocrisy of his actions.
"a friend in need..."See in text(Text of the Story)
In another example of satire, Irving ironically calls Tom a "friend in need." As a usurer, Tom is truly no one's friend because he takes advantage of the situation by exploiting the debtors vulnerability and ruthlessly driving them to bankruptcy.
"rejoicing, if a bachelor, in his celibacy...."See in text(Text of the Story)
In this context, "celibacy" refers to the state of not being married. Irving appears to be satirizing marriage in this paragraph by showing how Tom and his wife have such a terrible marriage that those who walk by are thankful that they themselves are not married.