BILL O'REILLY: The first villain that Stuart has analyzed for us is Media Matters, which is just an outrageous propaganda website, a hate site, and they have been for years. And they're tax-exempt. How can that possibly happen?
STUART VARNEY: Ok, they are a propaganda machine. That's all they do.
O'REILLY: Far left propaganda machine.
VARNEY: Absolutely. They're a hate-filled propaganda machine. They are technically a 501(c)(3) corporation. Ok, that means, they get a tax break. They're not supposed to engage overtly in politics all the time. But that's exactly what they do. They're supposed to get a tax break and they do get a tax break. But they're allowed to propaganda, they're allowed to put out propaganda. But it must not be-- it must be insubstantial.
O'REILLY: Ok, that's all they do is propaganda. And the guy who runs it also runs a re-elect-- an elect Hillary Clinton outfit. So, there's no way that the IRS can't know that this is a political unit, alright, devoted to harming conservatives and traditional Americans. Now what kind of a tax break do they get?
VARNEY: Well, if you donate money to Media Matters, it is a tax deduction to you. Because it's like you're giving money to charity.
O'REILLY: That's outrageous.
VARNEY: They don't pay money, they don't pay tax on the money that comes to them. They don't pay federal income tax.
O'REILLY: Free money for them.
VARNEY: It's free money on both sides of the fence.
O'REILLY: So this is a con, and this is obviously, this is not a group that deserves this tax free status. What can someone do to make the IRS revoke it?
VARNEY: Okay, an individual could file one of these forms with the IRS. It's form 13909. It's the tax-exempt organization complaint referral form. Simple form. Fill it out, complain, say what your beef is with Media Matters, and you can complain. That's how you do it.
O'REILLY: Can you formally sue them?
VARNEY: I presume you could.
O'REILLY: Say another group -- because there are a lot of conservative, traditional groups -- they could sue the IRS and say this is against the law.
VARNEY: I don't know about suing the IRS. I think they could complain to the IRS and say why don't you investigate.
