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Obama Calls Targeting By IRS 'Outrageous'; Rep. King Demands Full-Scale Probe

NEW YORK (CBSNewYork) -- A federal agency is under fire from politicians on both sides of the aisle. President Barack Obama says he will not tolerate the Internal Revenue Service being used for political purposes.

He promised to get to the bottom of the agency's admission it targeted conservative groups, CBS 2's Marcia Kramer reported on Monday.

"This is something people are properly concerned about," Obama said.

The president reacted for the first time to reports from the IRS' own inspector general that the tax agency targeted conservative groups, not individuals.

"If you've got the IRS operating in anything less than a neutral and non-partisan way, then that is outrageous. It is contrary to our traditions and people have to be held accountable and it's got to be fixed," Obama said.

According to the agency's own inspector general, it started in the spring of 2010 when the tea party movement was gaining steam. IRS specialists were told to focus on groups with "political sounding names" seeking tax exempt status. Groups with names like "we the people" or "take back the country," Kramer reported.

Later, agents got updated orders to be on the lookout for tea party applications or groups whose mission was to "educate about the constitution" or "advocate for smaller government," Kramer reported.

"It's absolutely disgraceful. This is really un-American, using the IRS -- the Internal Revenue Service -- to go after political enemies. That was the worst of Watergate. We thought that was over," Rep. Peter King (R-L.I.) said.

Congressman King took issue with what the president knew about the IRS' activities and when. The president said he learned about it last Friday.

"It means he was not telling the truth or he was totally incompetent. This issue was raised a year ago," Rep. King said.

The issue was raised a year ago, in the spring of 2012, when the then-head of the IRS, Douglas Shulman, was asked by members of Congress about complaints from tea party groups.

"There is absolutely no targeting. This is the kind of back and forth that happens when people apply," Shulman said.

However, the inspector general's timeline has the practice going on at least a year earlier.

"We need a full-scale investigation," Rep. King said. "We have to find out, one, if they already admit to 75 [groups]. We have to assume, look to see if there are more than that. I think we're going to find many more than that. We have to find out who did it; Not only who did it but who knew about it and how high up that goes."

Democrats and Republicans have both announced probes. In the Senate, which is controlled by Democrats, it's the Finance Committee, and in the GOP-controlled House, the Ways and Means Committee and the Oversight and Government Reform Committee are on the case, Kramer reported.

The entire saga was the talk of the town on Monday among New Yorkers.

"I don't think it's fair that the IRS should be doing that. They should be more diligent and not target any groups whatsoever," said Bill Mitzmacher of Bayside, Queens. "It does show that they exercise powers the wrong way."

"It's being blown out of proportion, personally. I suppose that they have to do an investigation, but I think it's just a political witch hunt," added Bill Duba of Chelsea.

"I don't think it was the right thing, no. I think somebody's going to be found out and they're basically going to put their feet to the fire," said Gary Shentowsky of Massapequa.

And in light of this scandal questions are being raised by a number of people on Capitol Hill about whether the IRS should be one of the key agencies overseeing Obamacare.

Some want assurances that decisions of health care will not be based on political affiliation.

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