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Acting IRS commissioner steps down, Obama announces

Updated: 7:35 p.m. ET

Amid investigations into possible political discrimination at the Internal Revenue Service, acting IRS commissioner Steven Miller has resigned, President Obama announced Wednesday evening.

On the heels of a Treasury inspector general (IG) report released Tuesday, Miller, a career bureaucrat,  resigned at the bequest of Treasury Secretary Jacob Lew.  According to a message from Miller to IRS employees obtained by CBS News, his assignment ends in early June. 

In remarks at the White House Wednesday evening, Mr. Obama expressed a lack of patience for the practices outlined in the report, and promised to hold responsible parties accountable.

"The misconduct that it uncovered is inexcusable," Mr. Obama said, referring to the IG report. "It's inexcusable and Americans are right to be angry about it. And I am angry about it."

Acting Commissioner of Internal Revenue Steven T. Miller
Steven T. Miller, formerly the acting Commissioner of Internal Revenue Service, stepped down Wednesday night.
IRS.gov

The president said he would "not tolerate this kind of behavior in any agency," but particularly not in the IRS. "As I said earlier, it should not matter what political stripe you're from, the fact of the matter is the IRS has to operate with absolute integrity."

A timeline released in Tuesday's report showed the IRS in the spring of 2010 began targeting groups with keywords like "Tea Party," "Patriot" and "9/12 Project" in their names to flag for heightened, typically burdensome, scrutiny. The agency insisted last week that no high-level employees were aware of the practice, but the IG report alleges that Lois Lerner - an IRS official in charge of oversight of tax-exempt groups - knew about it as early as June 2011.

CBS News has confirmed that Miller was informed of the IRS's targeting policy in May 2012. On July 25, 2012, Miller testified before a House Ways and Means Oversight subcommittee, but he did not mention the agency's heightened scrutiny for the applications of conservative groups. After learning of the controversial IRS practice, he also wrote at least two letters to Congress explaining the process for reviewing tax-exempt status applications; in neither of those letters did he mention the targeting.

Ranking member of the Senate Finance Committee, Orrin Hatch, R-Utah, said that while "a great number of questions remain" about the controversy, Miller's resignation is a "positive and important step as this agency struggles to try to regain the public's trust."

"A clean slate at the IRS with new leadership is imperative to fix this egregious encroachment on the lives of honest, hard-working Americans whose only sin was that they want to express their beliefs," Hatch said in a statement. "Whether a conservative, moderate or a liberal, what happened at the IRS is chilling and violates the most basic American principle that our liberty requires restraints on government."

Senate Minority Leader Mitch McConnell, R-Ky., added in his own statement: "If the President is as concerned about this issue as he claims, he'll work openly and transparently with Congress to get to the bottom of the scandal - no stonewalling, no half-answers, no withholding of witnesses.

"These allegations are serious - that there was an effort to bring the power of the federal government to bear on those the administration disagreed with, in the middle of a heated national election," he continued. "We are determined to get answers, and to ensure that this type of intimidation never happens again at the IRS or any other agency."

With McConnell and Hatch at the helm, all 45 Republican senators Wednesday demanded in a letter to the president utmost cooperation in upcoming probes "so that the public has a full accounting of these actions."

They wrote that Miller told them in 2012 there was "an unbiased, technical screening process used to determine which applications for 501(c)(4) organizations merited further review," and in two separate letters he "failed to note that explicitly political screens were used in reviewing applications, despite the fact the practice was apparently well known within the IRS as early as 2010."

A congressional hearing is scheduled for Friday and two additional hearings have been scheduled for next week. Several witnesses have been invited to testify about their knowledge of and participation in the targeting practice.

The House Oversight Committee is also requesting that five individuals be made available for transcribed interviews by committee staff beginning May 20, 2013. Attorney General Eric Holder on Wednesday told Congress that the possible criminal violations in the IRS case include "false statement violations" that may have been made. 

Meanwhile, a congressional source  tells CBS News that two Cincinnati, Ohio-based employees of the IRS have been disciplined and are "off reservation" in light of the Tuesday report. The source added that the investigation is ongoing and does not rest with the two employees. Senate Finance Committee Chairman Max Baucus, D-Mont., said "nothing determinative" about the Cincinnati pair's status was discussed in a closed-door meeting Tuesday with Miller.

As the scandal unfolds, calls for resignations, and even jail time, have come from both the left and the right.

Citing "such total mismanagement," Rep. Sander Levin, D-Mich. - the top Democrat on the House Ways and Means Committee - before Miller's resignation Wednesday called on both Lerner and Miller to step down.

House Speaker John Boehner, R-Ohio, even said on Wednesday that jail time, not just resignations, would be in order.

CBS News's Lindsey Boerma contributed to this report.