Update*: Nikki Haley provided reporters on Friday with a letter from the IRS stating that she is not being investigated on tax fraud related to a Sikh center where her father is a member. Nor, she says, was she even involved in the center's finances. “It is flat out not true,” Haley told Columbia's The State. “I have never kept their books. I've never made deposits. I never signed checks. I never did financial statements. This is a church that I don’t go to. There are no issues related to me and that church.”

Meanwhile, the Public Record responded to defend their decision to go public with their anonymous report:

We’re glad the IRS stated today that they apparently found nothing untoward regarding the temple’s finances ... Since no normal person would have been able to get the IRS to send them such a letter within a day of these questions hitting the blogosphere, and since the IRS certainly didn’t answer our phone calls, the only way to get an answer to our questions was by taking them to the public.

That seems like an admission that their "question" of whether Haley's indictment was imminent has a definitive answer of "no."  At least for those who hope their public officials are in good standing with the IRS, this is a happy ending.

Update 2:50 PM EST: It's certainly worth mentioning that others, most notably Peter Hamby of CNN, have questioned the reliability of the Public Record story. The Daily Beast, after initially posting an item linking to it, pulled their post from the web, and their spokesman told Politico, "It's not the kind of source we would generally aggregate, so we took it down." At any rate, the rumor persists, as do, we'd venture, its effects on her already narrow vice presidential odds.

Original Post:  The Palmetto Public Record cites two anonymous sources who say South Carolina's Governor Nikki Haley may be indicted for tax fraud this week, and while the report seems preliminary, even a rumor of misconduct can hurt Haley on the national political stage and in our all-important vice presidential speculation games. Haley is a Tea Party favorite and often comes up on lists of Mitt Romney's potential vice presidential picks. (She endorsed him and stumped for him before the South Carolina primary.) The Palmetto Public Record reported last week that the IRS is investigating Haley's father's Sikh worship center, and the charges would probably stem from her financial stake in that, the paper says. As Buzzfeed's Zeke Miller tweets, "Scratch one more name off the VP list." Of course, her chances were already diminishing based on a low approval rating in her state and Romney's loss in South Carolina despite her stumping. So feel free to return to your regularly scheduled assumptions that Romney will pick Florida Sen. Marco Rubio. 

*Editors Note: In instances where stories are later refuted or denied, The Atlantic Wire's policy is to immediately update the original noting the new information. Five days passed before we noted that Nikki Haley had presented evidence refuting the original Palmetto Public Record report. We regret the error of that delay.