Internal Revenue Service head resigns - Obama

US President Barack Obama delivers a statement on the IRS from the East Room of the White House in Washington, May 15, 2013. The president announced that acting IRS Commissioner Steven Miller had resigned in the wake of a growing scandal involving the agency. [Photo/Agencies]

WASHINGTON - US President Barack Obama said Wednesday that the acting commissioner of Internal Revenue Service (IRS), which is at the center of a scandal that subjects conservative groups to extra scrutiny, has resigned, and Treasury Secretary Jack Lew has accepted.

Obama made the announcement to reporters after meeting with senior Treasury officials at the White House, saying Lew had asked for and received the resignation of IRS chief Steven Miller.

Miller was asked to resign because IRS employees had flagged groups with "patriot" or "Tea Party" for additional reviews to see if they violated their tax-exempt status, creating an uproar. Miller had denied that the agency did this out of political or partisan motives.

Obama said the behavior of IRS is "inexcusable" and "an outrage". However, "The good news is, it's fixable". He promised a new system of checks and safeguards to "make sure nothing like this ever happens again".

"We will work with Congress as it performs its oversight role," said Obama, promising his administration will work with Congress on the issue.

"Democrats and Republicans, owe it to the American people to treat that authority with the responsibility it deserves and in a way that doesn't smack of politics or partisan agendas," said Obama.

A Treasury Inspector General report came out late Tuesday has faulted the IRS for ineffective management, and the agency allowed agents to improperly target tea party groups for more than 18 months.

In a letter announcing his resignation to colleagues, Miller said he would leave the agency in early June.

"This has been an incredibly difficult time for the IRS given the events of the past few days, and there is a strong and immediate need to restore public trust in the nation's tax agency," Miller wrote in the letter.