IRS DROPS ACORN

Washington, D.C. - The Internal Revenue Service has severed ties with ACORN, the controversial community-organizing group that was recently the subject of a series of hidden camera videos. ACORN, short for the Association of Community Organizations for Reform Now, has been providing tax assistance to low- and moderate-income taxpayers as part of the IRS's Volunteer Income Tax Assistance, or VITA, program since 2004. ACORN provided help on approximately 25,000 tax returns last tax season.

The group got into trouble after a pair of conservative activists posted a series of hidden camera videos on the Internet in which they pretended to be a pimp and prostitute seeking help with preparing tax returns and finding housing. They filmed an ACORN employee giving them advice on how to claim fictitious underage prostitutes as dependents and how to file a Schedule C claiming their business as a performing art.

Both the Senate and House voted to strip ACORN of funds for its low-income housing assistance and census-taking work. ACORN fired several of the employees in the videos and hired former Massachusetts Attorney General Scott Harshbarger to head an internal review.

The IRS said that it was terminating its relationship with ACORN, and the group said that it had reached a similar decision to close down its own VITA operations.

MINNESOTA ENDS TAX RECIPROCITY WITH WISCONSIN

St. Paul, Minn. - The State of Minnesota has decided to end its income tax reciprocity program with Wisconsin, effective Jan. 1, 2010. As a result of the end of the agreement, Minnesota residents who work in Wisconsin will be required to file returns in both states next year.

Termination of the agreement will impact about 13,000 Minnesotans and 33,500 Wisconsin residents who meet the filing requirements and work across the border, the Minnesota Department of Revenue estimated. No Minnesota resident will pay more in Minnesota tax, but some who work in Wisconsin will pay more Wisconsin taxes.

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