ACORN, in response to an undercover expose of potential wrongdoing by some employees, pledged Wednesday to follow through on plans to conduct a thorough internal review of its practices -- on the same day that the organization filed a lawsuit against the filmmakers whose hidden-camera sting brought the community organization to its knees.
The lawsuit, filed in a Baltimore court, stems from an undercover video showing ACORN employees Shera Williams and Tonja Thompson providing advice to two filmmakers posing as a pimp and prostitute on how to skirt tax laws.
The filmmakers, James O'Keefe and Hannah Giles, are named as defendants in the lawsuit, along with Breitbart.com, a Web site managed by conservative commentator Andrew Breitbart, which posted the videos. Breitbart released five similar videos that O'Keefe and Giles recorded in ACORN offices in Washington, D.C.; Brooklyn, N.Y.; San Bernadino, Calif., and San Diego, as well as the Baltimore office.
The videos prompted the Brooklyn District Attorney's Office to launch a criminal investigation, the U.S. Census Bureau to several ties with ACORN and ACORN to fire four of the employees shown in the videos. And on Wednesday, the Internal Revenue Service announced it also was severing ties with the organization.
The IRS said it would no longer include ACORN in its volunteer tax assistance program. The program offered free tax advice to about 3 million low- and moderate-income tax filers this spring. ACORN provided help on about 25,000 returns, the IRS said.
Darrell Issa, R-Calif., issued a statement following the announcement, saying "ACORN's failure to institute firewalls between its charitable and political activities have raised significant questions surrounding its management of federal dollars. Cutting ties is the first step, but cannot be the last one."
"Self-investigation is not a sufficient substitute for action by the Congress, which is why I have written to the Chairman of the Oversight and Judiciary Committees to request that they convene immediate hearings into ACORN's activities."
But ACORN says no tax returns were actually prepared at the Baltimore office, and that the audio portion of the video recorded there was obtained illegally, since Maryland requires two-party consent for sound recordings. The multimillion-dollar lawsuit cites "extreme emotional distress" on behalf of two workers who were fired after the video was posted online.
The videos were "clear violations of Maryland law that were intended to inflict maximum damage to the reputation of ACORN, the nation's largest grassroots organizer of low-income and minority Americans," said ACORN attorney Arthur Schwartz. "Unfortunately they succeeded."
At the same time, ACORN is moving forward with its pledge to review its operations. The Boston attorney hired by ACORN to conduct an independent probe of the group vowed a "no holds barred" investigation on Wednesday.
"My name is on the line and so is the name of my firm, so we will call this as we see them," Scott Harshbarger told reporters on a conference call.
Harshbarger, the former attorney general of Massachusetts now serving as senior counsel at Proskauer Rose LLP, was hired Tuesday to lead an "independent and comprehensive" internal investigation into ACORN's activities -- a decision that was met with skepticism from some members of Congress, including one lawmaker who has repeatedly called for hearings into the use of taxpayer funds.
Harshbarger said the probe had not yet begun as of Wednesday and said there was no "specific timetable" for its completion.
ACORN CEO Bertha Lewis, who joined Harshbarger on the conference call, said the organization was "very, very serious" about the review and vowed to "set things straight" following the release of five hidden-camera videos.
"We were just as shocked and horrified as the American public was," Lewis told reporters of the conduct seen on the videotapes. "I will not tolerate such behavior. It is incumbent upon me and my board to set things straight."
Lewis said ACORN officials are cooperating with law enforcement agencies, adding that no subpoenas had been received by the organization as of Wednesday.
Meanwhile, House Judiciary Committee Ranking Member Lamar Smith, R-Texas, and House Oversight and Issa called on the Government Accountability Office to investigate whether ACORN misused federal funds.
In a letter sent to GAO Comptroller General Gene Dodaro on Wednesday, Smith and Issa expressed concern that millions of taxpayer dollars may have been used to support criminal efforts by the organization.
"Congress cannot ignore allegations that federal funds are being used by an organization involved in criminal conduct," the letter read. "American taxpayers are rightly outraged and Congress has a responsibility to act. We need a full investigation into ACORN's use of federal funds and we need the Democratic-led Congress to put a bill on the President's desk to ensure that no future funds are received by ACORN."
The letter continued, "ACORN has a long history of ignoring federal laws. No organization with that kind of a record should benefit from American taxpayer dollars."
ACORN said on Sept. 16 it would stop any "new intakes" -- essentially closing its doors to new clients -- until it completed an internal investigation prompted by the release of five hidden-camera videos that depicted workers advising a fake pimp and prostitute to lie to get loans for a brothel.
"The administration takes the accountability very seriously," Gibbs told reporters.
In addition to a Justice Department watchdog's probe into whether ACORN has applied for or received DOJ grant money, ACORN announced on Monday that it has suspended all 2009 tax preparation services.
FOXNews.com's Joshua Rhett Miller and Steven Clark and the Associated Press contributed to this report.