Acting IRS Chief Resigns, Obama Condemns 'Inexcusible' Targeting of Tea Party Groups

Obama Condemns IRS Targeting After Report Details Agency Missteps

May 15, 2013, 4:26 PM

May 15, 2013— -- President Obama announced on Wednesday that the Internal Revenue Service acting commissioner Steven Miller has submitted his resignation for his agency's "inexcusable" targeting of conservative groups who had applied for tax-exempt status.

"I reviewed the Treasury Department watchdog's report and the misconduct that it uncovered is inexcusable," Obama said in the East Room of the White House. "Americans have a right to be angry about it, and I'm angry about it."

"I will not tolerate this kind of behavior in any agency but especially at the IRS given the power that it has and the reach it has inside of our lives," he added.

His comments come after the Treasury Inspector General released a report on Tuesday implicating "poor management" for allowing the practice to singling out groups with names like "tea party" or "patriot" in their names for additional scrutiny.

Obama said that he intends to hold the "responsible parties accountable" and pledged to work with Congress and the Treasury department to investigate the problems at the IRS and ensure that it never happens again.

"The IRS has to operate with absolute integrity," Obama said. "We will work with Congress as it performs its oversight role and our administration has to ensure that we are working hand in hand with Congress to get this thing fixed."

In a message to IRS employees on Wednesday, Miller said he would leave his post in early June in an effort to address the "strong and immediate need to restore public trust in the nation's tax agency."

"While I recognize that much work needs to be done to restore faith in the IRS, I don't want anyone to lose sight of the fact that the IRS is comprised of incredibly dedicated and hard-working public servants," Miller wrote. " I have strong confidence in the IRS leadership team to continue the important work of our agency."

It has been a scandal-filled week for the Obama administration, which has fielded questions about the administration's response to the Benghazi attack in Libya, and a Justice Department probe of months of telephone records from Associated Press reporters.

Lawmakers have also raised questions about the Obama administration's knowledge of the IRS targeting.

For his part, Obama said on Monday that he first learned that the IRS was inappropriately targeting conservative groups when news outlets reported the story on Friday.

Other than Miller's resignation, there has been no indication that other IRS officials responsible for the policy of targeting conservative groups have been disciplined.

Today CNN and MSNBC reported that two IRS agents have been disciplined, but four senators on the Finance Committee, officials on the House Oversight committee and several Congressional leadership aides say they had not been told of that.

Sen. Charles Grassley (R-Iowa), a member of the committee, dismissed the idea of a rogue employee or two.

"If heads are going to roll, they will have to roll in Washington -- not just Cincinnati," Grassley told ABC News. "This is more than a rogue employee."READ: ABC News full coverage of the IRS scandal

Congressional outrage has come fast and furious since the IRS official in charge of tax-exempt groups, Lois Lerner, first admitted and apologized on Friday for inappropriately targeting conservative groups.

House and Senate committees have two hearings in the coming days, and high-ranking lawmakers of both parties, including House Majority Leader John Boehner, have called for accountability.

"Now my question isn't about who is going to resign," Boehner (R-Ohio), told reporters today. "My question is, Who's going to jail over this scandal?"

The Inspector General's report suggested that IRS employees did not act from political motives in targeting these groups for additional scrutiny.

But according to the report, IRS employees also did not consider the potential for the very kind of political scandal these revelations have sparked.

Now other groups are raising questions about IRS inquiries they received in recent years that they believe may have been politically motivated.

Franklin Graham, son of evangelical pastor Billy Graham, said that his organizations were audited by the IRS in 2012 and he believes that the incident is linked to the agency's current troubles.

"An IRS agent arrived October 15, 2012, to conduct a review of Samaritan's Purse; and an agent arrived on October 29, 2012, to conduct a review of the Billy Graham Evangelistic Association," Graham wrote in a letter to Obama. "In light of what the IRS admitted to on Friday, May 10, 2013, and subsequent revelations from other sources, I do not believe that the IRS audit of our two organizations last year is a coincidence—or justifiable."

The IG report also found that while the IRS's probing halted or delayed dozens of conservative groups, the agency approved other groups who probably needed additional scrutiny.

These IRS revelations have also put Democrats in a bind. For several years, Senate Democratic lawmakers as well as outside groups have pushed the IRS to crack down on excessive political activity by tax-exempt groups. One letter came from seven Senate Democrats in 2012, another was sent to the IRS in 2010.

Senate Minority Leader Mitch McConnell (R-Ky.) blamed Democrats for creating an environment that made the IRS's misdeeds possible.

"Our Democrat friends should also acknowledge their role in inculcating this culture of intimidation, due to repeated calls for increased IRS scrutiny of groups like the very ones that were targeted," McConnell said on Tuesday.

Today, some liberal groups are coming forward with claims that they also received similar letters from the IRS, suggesting that it was not only conservative groups that received this treatment.

"Progress Texas and the Tea Party strongly disagree on the role of government. Yet, when we applied for tax-exempt status, Progress Texas received the same type of additional scrutiny that Tea Party groups are complaining about," said Ed Espinoza, the group's executive director. "The similar treatment indicates the IRS was likely addressing a flood of 501c4 applications after Citizens United, and undermines the paranoid notion that Tea Party groups were singled out."

Still, the IG report makes it clear that IRS officials flagged dozens of groups – 1/3 of the applications that received extra scrutiny – for no reason other than the fact that their names included the words "tea party" or "patriot" or otherwise suggested conservative viewpoints.

ABC News' Jeff Zeleny and John Parkinson contributed to this report.