Source: Two IRS employees disciplined in wake of targeting scandal

Two Cincinnati, Ohio-based employees of the Internal Revenue Service have been disciplined and are "off reservation," a congressional source tells CBS News, after a Treasury inspector general report out Tuesday showed the agency targeted for excessive review conservative groups seeking tax-exempt status.

The congressional 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 acting IRS commissioner Steve Miller.

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

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.

Citing "such total mismanagement," Rep. Sander Levin, D-Mich. - the top Democrat on the House Ways and Means Committee - on Wednesday called on Miller and Lerner to resign.

All 45 Republican senators Wednesday demanded in a letter to President Obama 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."

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

President Obama's spokesman Jay Carney on Wednesday insisted no one within the White House was aware of the targeting, and said Mr. Obama will discuss the "inappropriate" activity later in the day with Treasury Department officials. But "without this information becoming public" for two years, the Senate GOP tells the president in their letter, "there is no evidence that your administration would have done anything to make sure these abuses were brought to light and dealt with in a transparent way."

CBS News's John Nolen contributed to this report.

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