An anonymously sourced report on Gov. Nikki Haleys rumored involvement in an ongoing Internal Revenue Service investigation of the Sikh Religious Society of South Carolina took off on national news websites and gripped the political class in South Carolina this week.
But on Friday, just two days after the report stoked the rumor mill, an IRS letter released by the Governors Office showed that not only had no federal investigation gotten off the ground before the IRS pulled the plug on its initial inquiry into the societys finances but also that the matter had been resolved in fall 2011.
Thursday in an interview with The State, Haley denied that she was in any way involved in the alleged probe.
Rumors have swirled for weeks that Haley, a former accountant, was somehow involved in the audit.
While the blogger who posted the report continued to back his efforts Friday, saying he was just asking questions, the governor slammed him and the way the report was handled by mainstream media outlets who rehashed and posted links to the report.
Its incredibly frustrating when unaccountable bloggers will take money to smear trash about somebody, and the mainstream media will pick it up and run with it, Haley said.
Haleys parents are leaders with the religious society, which is based in Chapin.
Haley, who is Indian-American, was raised a Sikh but converted to Christianity 15 years ago.
A spokesman for the governor said the letter released Friday represented the closure of the IRS inquiry that the blogger, Palmetto Public Record editor Logan Smith, posted initial documents about.
The Governors Office requested the IRS letter released Friday after facing a barrage of questions about Smiths report.
According to an earlier March 31, 2011, letter the IRS sent to the Sikh Religious Society that was first posted on Smiths website Wednesday, the IRS sought a range of records from the nonprofit organization, including charitable receipts, bank statements and correspondence sent to contributors and copies of various tax forms for calendar years 2007-09.
But according to the IRS letter released Friday the IRS determined an examination was not warranted for the tax year that ended Dec. 31, 2009.
The States Gina Smith contributed to this report.