(May 20, 2025) – The Internal Revenue Service informed Grand Canyon University that it has reaffirmed its 501(c)(3) tax-exempt status as an Arizona nonprofit institution after completing a comprehensive four-year examination of the school.
The decision comes on the heels of the U.S. Department of Education (ED) rescinding its proposed $37.7 million fine over unsubstantiated claims related to GCU’s disclosures in doctoral programs and further vindicates the university from years of regulatory weaponization and lawfare that had been carried out by officials under the Biden Administration against the largest Christian university in the country.
“We greatly appreciate the comprehensive and thoughtful process in which the IRS re-examined the structures of our operations,” said GCU President Brian Mueller. “It was a very detailed and cooperative process to ensure we check all the boxes required of a 501(c)(3) tax-exempt entity. We also appreciate the fact that the IRS was willing to do a site visit to conduct interviews and we welcomed the opportunity to demonstrate firsthand the significant impact GCU is making – both on our campus and in the surrounding community – as an Arizona nonprofit institution.”
The IRS audit, which is routine for entities that have undergone a change in status, ultimately reviewed five tax years (2014-19) and included an extensive site visit in which officials interviewed GCU leaders and examined thousands of documents from both before and after the July 1, 2018 nonprofit transaction to ensure the university was at all times operating within the parameters of a 501(c)(3) entity. The agency issued an acknowledgement letter stating “We have completed the examination for the issue and dates above and closed the examination with no change” – in effect reiterating its initial findings that GCU meets all requirements of a 501(c)(3) organization and has a charitable educational purpose worthy of tax-exempt status.
The recent IRS and ED decisions stand in stark contrast to false accusations made by officials in the Biden Administration related to GCU’s nonprofit status and doctoral disclosures.
Related to GCU’s status as a 501(c)(3) tax-exempt Arizona nonprofit institution, all of the following independent bodies have acknowledged that status or ruled in GCU’s favor:
- IRS
- State of Arizona
- Higher Learning Commission
- Arizona Private Postsecondary Board of Education
- NCAA Athletics
- And, importantly, a three-judge panel of the Ninth Circuit Court of Appeals in Grand Canyon University v. Cardona which ruled unanimously in November 2024 that ED lacked the authority under the Higher Education Act to make such a determination and remanded it back to the Department to apply the correct legal standard. GCU is cooperating with ED in that process and is hopeful a decision will be rendered soon. Ten of Arizona’s Congressional members have sent a bipartisan letter of support to ED for GCU’s nonprofit status given the court ruling.
Related to GCU’s doctoral disclosures, all of the following have directly refuted or come to the opposite conclusion of ED’s initial claims of “substantial misrepresentation” for which former Education Secretary Miguel Cardona stated before Congress that it was his intent to “shut down” the university:
- U.S. Department of Education, rescinding its original claim, with prejudice.
- Higher Learning Commission, which characterized GCU’s disclosures as “robust and thorough” in its 2021 comprehensive review.
- Arizona State Approving Agency of the Department of Veterans Affairs, which found “no substantiated findings” in its 2024 review of GCU’s disclosures and processes.
- 11th Circuit Court of Appeals and U.S. District Court for the Northern District of Georgia in Young v. GCU which both refuted similar allegations related to the time and cost to complete a doctoral degree at GCU.
In rescinding its record fine, ED acknowledged that is has not established that GCU violated any Title IV requirements, stating unequivocally in a Joint Stipulation of Dismissal Order that “there are no findings against GCU, or any of its employees, officers, agents, or contractors, and no fine is imposed.”
In a statement to the Washington Times and other media on Monday, ED spokeswoman Ellen Keast said: “Unlike the previous administration, we will not persecute and prosecute colleges and universities based on their religious affiliation. The Trump administration will continue to ensure every institution of higher education is held accountable based on facts — but department enforcement will be for the purpose of serving students, not political bias.”
Despite the numerous rulings mentioned above, the Federal Trade Commission has also targeted GCU. The FTC publicly stated in October 2021 that it would coordinate efforts with the Department of Education and Department of Veterans Affairs to go after for-profit schools (only ED put GCU in this classification), and subsequently launched one of the five investigations those three agencies levied against GCU in the next three years. The FTC then filed a lawsuit that duplicates the same manufactured nonprofit and doctoral disclosure claims that have repeatedly been refuted, rejected and dismissed.
In March, the U.S. District Court of Arizona dismissed the case against GCU, ruling that the FTC exceeded its authority because GCU is not a corporation “operating for its own profit or that of its members.” Yet, the FTC lawsuit continues against Grand Canyon Education, which provides services to GCU, and Mueller. Any FTC continuation of its nonprofit disclosure allegations following the Ninth Circuit ruling and IRS decision, and the doctoral disclosure allegations following ED’s fine-action dismissal and the other court/agency rulings, would only further underscore the multi-agency attack initiated under the Biden Administration to tie GCU up with protracted legal proceedings.
