Attorney General Eric Holder said Internal Revenue Service employees may have committed criminal civil rights violations when they targeted conservative groups seeking tax-exempt status.
Holder, in testimony before the House Judiciary Committee, labeled as "outrageous" the revelations in a Treasury Department inspector general's report on the abuses, and said he ordered a criminal investigation into the matter last Friday.
Holder said the probe would extend to all IRS offices believed to have been involved in the targeting, including offices in California, Ohio and Washington, D.C.
"I can assure you and the American people that we will take a dispassionate view of this," Holder told lawmakers. "This will not be about parties, this will not be about ideological persuasions. Anybody who has broken the law will be held accountable."
Holder was on the hot seat not only over the IRS accusations, but the new revelation that his Justice Department secretly subpoenaed the phone records of Associated Press journalists in its search for the source of a press leak.
Holder told lawmakers he had recused himself from that case and knew nothing about it despite persistent questioning from lawmakers.
"I don't know what happened there with the AP and the Justice Department," said Holder. He blamed the episode on his deputy, James Cole, who authorized the subpoenas.
Holder is the first administration official to testify before Congress on how the IRS was singling out conservative groups seeking tax-exempt status and slowing their approval. But several House and Senate committees have already announced plans to hold hearings on their own. The House Ways and Means Committee will hear testimony Friday from acting IRS Commissioner Steven Miller as well as from J. Russell George, the Treasury inspector general for tax administration who authored the report on the targeting.
George's report laid blame for the incident on poor management, but Republicans believe it was deliberate discrimination orchestrated to undercut their chances in last year's elections.
Just before the hearing began, House Speaker John Boehner, R-Ohio, said he believes the IRS broke the law.
The GOP has been complaining to the IRS for months that the agency was discriminating against conservative groups. But IRS officials have always denied treating those groups differently.
"My question isn't about who's going to resign," Boehner said. "My question is, who's going to jail over this scandal?"
All 45 Republican senators, meanwhile, signed a letter to President Obama Wednesday demanding cooperation from his administration as Congress probes the IRS.
"It is imperative that the administration be fully forthcoming to ensure that we begin to restore the confidence of our fellow citizens after this blatant violation of their trust," the letter states.
IRS officials reportedly revealed in a closed-door meeting on Capitol Hill Wednesday that they believe the targeting of conservative groups was the work of a couple of "rogue" employees.
According to the inspector general's report, IRS employees used to mark the applications of conservative groups with the phrase a "Be On the Look Out" to alert others to give it closer scrutiny.