The U.S. Department of Education under Secretary Linda McMahon has formally restored Grand Canyon University’s nonprofit status, a reversal of a years-long dispute that had kept recognition of the Phoenix-based university’s tax-exempt classification in limbo.
The Department of Education’s (USDOE) action means it will now consider Grand Canyon University (GCU) a nonprofit institution for federal purposes, aligning its treatment under federal student-aid rules with the university’s longstanding recognition as a nonprofit by the Internal Revenue Service.
“We are appreciative that officials within the current Department of Education adhered to the recent Ninth Circuit decision in our favor and conducted an objective and thorough review of GCU’s operations in determining GCU’s nonprofit status under the correct legal standard,” GCU President Brian Mueller said in a statement. “We look forward to working with the Department in a cooperative manner moving forward and being part of the conversation to address the many challenges facing higher education.”
The move follows a May decision by the USDOE to reverse a $37 million fine against GCU, imposed under the Biden administration with prejudice. The fine was the largest ever levied by the agency against a university.
In November 2024, the U.S. Court of Appeals for the Ninth Circuit ruled that the Department of Education had unlawfully denied GCU nonprofit status and remanded the matter to the department for reconsideration under the correct legal standard. In 2018, the IRS reaffirmed GCU’s 501(c)(3) tax-exempt status after a multi-year audit, concluding that the university met all requirements of a nonprofit educational institution.
The restoration of nonprofit recognition comes as several Arizona members of Congress and other lawmakers have publicly advocated for the university’s status.
U.S. Rep. Eli Crane (R-AZ02) took to X on Monday to highlight the Education Department’s decision, calling the reinstatement of nonprofit status a significant development for the institution.
On March 5th, I joined @RepAndyBiggsAZ in a bipartisan delegation letter urging @usedgov to recognize @gcu as a nonprofit institution of higher education.
U.S. Rep. Andy Biggs (R-AZ05) also posted on X following the department’s announcement, noting the change in federal recognition and urging continuation of support for aligned legislative efforts.
In previous years, Arizona Republican lawmakers, including Reps. Gosar and Biggs had criticized the Department of Education’s handling of the university’s nonprofit status and its regulatory actions. They characterized earlier denials and fines as misplaced or excessive and called for greater alignment between federal treatment and GCU’s IRS-recognized status, per the Arizona Sun Times.
Gosar told the outlet at the time, “GCU is being targeted for its religious views and for being the largest Christian university in the country. The Department of Education should recognize GCU’s lawful nonprofit status and stop the harassment.”
With the Education Department’s updated decision, the agency will now consider GCU’s application as a nonprofit institution in future federal evaluations, including eligibility for Title IV federal student financial aid programs.
“This decision removes the cloud of confusion over our nonprofit status and allows us to put our complete focus and resources on our mission to provide affordable, Christian higher education to students from all socioeconomic backgrounds,” Mueller added. “We are excited to move forward with clarity and purpose.”
According to the university, nonprofit recognition is also expected to expand access to private scholarships restricted to nonprofit institutions, increase eligibility for nonprofit-specific grants and partnerships, restore eligibility for future government relief programs, reduce legal expenses associated with defending its status, and solidify GCU’s standing as a voting member of NCAA athletics.
President Donald Trump has done an admirable job at defanging the IRS, which was converted into a weaponized agency targeting their political enemies.
Chief Justice John Marshall famously pronounced early in our nation’s history that “the power to tax is the power to destroy.”
The Democrats inside the Biden IRS took that to heart. They hired thousands of new IRS agents to harass businesses, rich people, and, in some cases, Republican donors. Some of the lieutenants to the infamous IRS enforcer Lois Lerner, the woman who aimed her agency’s auditing guns at conservative groups, are still active at the tax agency.
One of the most noxious of Biden’s left-over regulatory rules applies to partnerships – an increasingly common form of business organization and expansion. Microsoft’s revenues/profits flow down through its business partners.
Business partnerships are vital contributors to the U.S. economy. A 2024 study by Ernst and Young for the Small Business Entrepreneur Council found that 10 million Americans work for these partnerships, and they generate $1.3 trillion in GDP.
The IRS evidently thinks they are TOO successful.
A gang of holdovers from the Biden administration and the ranking Democrat on the Senate Finance Committee, Ron Wyden of Oregon, are trying to administratively change the taxation of pass-throughs and partnerships and subject these entities to “guilty until proven innocent” audits. The changes would alter the “economic substance doctrine” which determines how the taxes on a business’s profits are applied to the partners. If the entities are found liable for increased tax assessments, they could face a giant tax bill AND a confiscatory 60% strict liability penalty.
These partnership rules are admittedly murky and may need updated protections against potential tax evasion abuses. But this rewrite of the tax laws would be applied WITHOUT CONGRESSIONAL APPROVAL. The Trump admin promised to end this illegal rewrite of the tax laws, but because of the turmoil at the IRS – with a revolving door of IRS Commissioners – the Biden-era rules still stand.
Meanwhile, Wyden has introduced legislation to codify these new rules into law. Get this: the Joint Committee on Taxation scores these IRS “reforms” as a potential $730 billion business tax increase over the next decade.
If the IRS isn’t told to cease and desist, they could be the perpetrators of the largest non-congressionally approved tax increase in American history.
The Trump administration is supposed to be easing the tax burden on our businesses and employers to make them more globally competitive, not handing them a three-quarter trillion-dollar tax INCREASE.
Trump or Treasury Secretary Scott Bessent should fix this tax raid on business before it reverses some of the job-creating benefits of Trump’s Big Beautiful Bill.
Stephen Moore is a contributor to The Daily Caller News Foundation, a visiting senior fellow at the Heritage Foundation, and a co-founder of Unleash Prosperity.
Donald Trump has promised to create millions of new high-paying jobs.
One easy first step to doing that is to repeal Biden-regulations on America’s 4 million business partnerships (sometimes known as S-corporations) that are prolific job creators. The latest estimates find 10 million Americans employed by these business partnerships, with $800 billion paid in worker salaries and benefits.
For example, “95 percent of Microsoft’s commercial revenue flows directly through” its “partner ecosystem.” The profits from these enterprises are passed through to the 4 million partners, who make tax payments based on their share of those earnings.
These have been the tax rules governing partnerships for many decades. The Biden administration didn’t like the tax rules, so instead of asking Congress to change them, Biden’s Treasury Department worked through the back door to unilaterally modify the rules, as part of its “fairness” agenda.
The precise tax target is a technique used by partnerships to lower their tax liability called “basis shifting.” While technically complex (because everything with the U.S. tax code is complicated), it is also entirely legal and has been used by partnerships for decades to adjust the value of their assets during a transaction or transfer. Whatever one thinks of basis shifting, the Internal Revenue Service (IRS) doesn’t have the unilateral authority to change the tax laws — only Congress does.
The Biden crackdown treated business partners as tax cheats. When they hired 87,000 agents to harass companies and individuals, nearly 4,000 of these IRS tax collectors were hired to among other things, “expand enforcement focusing on complex partnerships.”
The more than four million business partnerships became an overnight suspect class, as did the tax returns of millions of partners.
To pry money out of these partnerships, the Biden team wanted to create a retroactive tax (which should be illegal) by changing the rules and apply them going back six years in time. So a tax structure that may have been perfectly legal in the past could now trigger investigations, fines, and litigation.
Biden Treasury Secretary Janet Yellen also created a new investigative office to oversee and harass partnerships. That should be shutdown.
So a tax structure that may have been perfectly legal in the past could now trigger investigations, fines, and litigation.
More than 90% of partnerships are small businesses, according to an Ernst and Young study prepared for the Small Business & Entrepreneurship Council (SBE Council) last year. The business partnership arrangement allows these firms to have ready access to needed capital to expand their operations. In all these companies generated $1.3 trillion to our GDP.
These partnership arrangements allow promising small companies to grow into large ones. This uniquely American business structure is a hallmark of U.S. entrepreneurial success — a path for businesses to go from good to great.
It isn’t broken. The system works. That’s why the Trump Treasury Department needs to immediately command the IRS to cease and desist the Biden witch hunt against these partnerships.
It’s a war on wealth. A war on U.S. businesses. And it’s a direct assault on the Trump promise to “make America great again.”
Stephen Moore is a contributor to The Daily Caller News Foundation, a senior fellow at the Heritage Foundation, and a co-founder of Unleash Prosperity. His latest book co-authored with Arthur Laffer is “The Trump Economic Miracle.”
Arizona’s population has exploded over the past three decades, thanks, in part, to movement from states under the control of leftist politicians.
Recently, the American Enterprise Institute (AEI) shared data from the Internal Revenue Service, showing that almost 1.5 million individuals have migrated to Arizona from other states, between the years of 1990-2021.
The Grand Canyon State’s gain has been due to other left-leaning states’ loss. California, for example, has shed more than 4.6 million people during that timeframe. New York lost over 4.6 million people as well, and Illinois said ‘goodbye’ to another 2 million individuals.
It wasn’t just Arizona that benefited from the migration patterns of people for the past thirty years. More than 3.7 million people made their way to Florida, and another 2.6 million individuals relocated to Texas.
In an op-ed for Newsweek, Edward J. Pinto, the Senior Fellow and Codirector of the AEI Housing Center, wrote, “For the past 30 years, progressive policies have fueled a mass exodus of the citizens of California, Illinois, New Jersey, New York, and Massachusetts, whether with high-, middle-, or blue collar incomes. From 1990 to 2021, net domestic migration fleeing their states has totaled 13 million… Meanwhile, the red states of Florida, Texas, North Carolina, Arizona, Tennessee, Nevada, and South Carolina have had net in-migration of 13 million over the same period.”
Pinto added, “If these blue state governors want to reverse this mass out migration, time is of the essence. They should focus on enacting the kinds of policies that drew their erstwhile residents to Florida and Texas: lowering taxes, getting tough on crime, promoting deregulation, reforming public pensions, enacting school choice, enforcing immigration laws, helping blue-collar workers find good paying jobs, ending rent control where prevalent, and adopting light-touch density (LTD) and livable urban villages(LUV). LTD and LUV legalize homes built by the free market that are affordable and inclusionary.”
Former Arizona Governor Doug Ducey, who served eight years as the state’s chief executive, reacted to a recent article from Fox News about the failure of California’s Gavin Newsom to end homelessness in San Francisco, stating, “The 21st anniversary is coming up… for California residents who are sick of ‘leaders’ who talk big and deliver nothing, there’s a simple solution: UHaul.com.”
The 21st anniversary is coming up… for California residents who are sick of “leaders” who talk big and deliver nothing, there’s a simple solution: https://t.co/UOGgmZupCOpic.twitter.com/DpEyTdxHmi
Arizona Senate President Warren Petersen told AZ Free News, “Approximately 200 people move to Arizona every day. If you ask why, they will tell you because it is a safe, good place to raise a family and educate your kids. They will also say things like, it is a great place to do business, with low taxes and fewer regulations. What they are really saying is that the state they are fleeing has bad public policy and Arizona has good public policy. This is a direct reflection of the laws passed by the Republican-led legislature.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
One of the highest priorities for the incoming Trump administration should be to end the Democrats’ weaponization of powerful government agencies against taxpayers and businesses they don’t like. Nowhere has this mission been more pernicious than the party-line vote to fund the Internal Revenue Service (IRS) with nearly $80 billion and hire tens of thousands of new tax snoops.
By the way, according to the IRS press office, the additional audits have so far raised less than $2 billion, far less than the additional expenditures. So how is this program “paying for itself”?
This was never about seeking tax fairness as liberals claimed. It was about unleashing an aggressive, permanent and unchecked enforcement assault on U.S. taxpayers to rake in more tax dollars to pay for liberals’ political agenda. The American people voted to end such madness, and the IRS should now act accordingly and immediately by ignoring the Biden administration’s 11th-hour efforts to ram through a slew of costly new rules and regulations as they now head toward the exit.
Progressive leaders made wildly erroneous claims that a supersized IRS would raise nearly $1 trillion over 10 years from stepped-up enforcement against higher-income earners and businesses. And they attempted to justify their proposals by broadly portraying entrepreneurs, small businesses, family-owned private enterprises and the wealthy as tax cheats.
The entire exercise was designed to harass lawful taxpayers and threaten them as guilty parties until they could prove themselves innocent.
Fortunately, most voters saw their efforts for what they were: a liberal fantasy grab of other peoples’ money and an attempt to assert greater control over their livelihoods. Democrat leaders did not help themselves by immediately oversteering the car. This included efforts to have the IRS spy on personal bank accounts and require income reporting for basic Venmo payments among friends, as well as punitive measures on those whose incomes are derived from tips or numerous other types of transactions.
Another target for IRS harassment has been business partnerships. Such businesses are one of the most common and practical ways to structure private enterprises of all sizes. A simple analogy might be when one party owns an available tractor and another has available land, and they go into business together to farm the land.
All told, there are an estimated 4.5 million business partnerships in America. Collectively, these partnerships generate more than $12 trillion in revenue and employ millions of U.S. workers.
Yet the IRS, before President-elect Donald Trump returns to office, is now stealthily attempting to implement new rules that threaten the future viability of such partnerships. These proposed changes to the tax code impact what is known as “basis shifting” — a routine and legal practice that business partners use to adjust the tax basis of their respective assets. In short, the proposed rules would deliberately embed uncertainty and subjective IRS interpretations of how taxable assets are treated when one transfers or sells their interest in a business partnership. Basically, the opposite of tax fairness.
Meanwhile, the multibillion-dollar bounty the Biden administration claimed their newly armed IRS would secure through added enforcement and new tax rules has completely failed to materialize. The IRS recently disclosed that just $1 billion had been recovered since their aggressive campaign went into effect two years ago, and there is no way of knowing if that would have occurred with or without it.
How ironic and sad is it for taxpayers to learn that the vast amount of the $80 billion Democrats awarded to the IRS to recover or find new “savings” is instead on pace to serve as a massive cost to the U.S. Treasury?
The last thing voters now want is for the IRS to impose any more costly last-minute tax changes that will make problems even worse for taxpayers, workers and employers. Accordingly, the Biden team and the IRS should put down their pencils.
And if they persist with these fourth-quarter rule changes, the Trump team should be prepared to immediately repeal them in January.
Stephen Moore is a contributor to The Daily Caller News Foundation and a visiting fellow at the Heritage Foundation. His new book, coauthored with Arthur Laffer, is “The Trump Economic Miracle.”
