Barack Obama, the US president, has said that the federal tax agency’s targeting of conservative political groups was "intolerable and inexcusable".
The US president said on Tuesday in a statement that some Internal Revenue Service (IRS) employees failed to apply the law fairly and impartially, adding that regardless of how it happened, it was wrong.
Obama said he had asked Treasury Secretary Jack Lew to hold accountable those responsible to ensure it never happens again.
The report, from the Treasury inspector general for tax administration, blamed ineffective IRS management for allowing agents to improperly target tea party groups for extra scrutiny when they applied for tax exempt status.
The IRS apologised for the practice on Friday.
Eric Holder, the US Attorney General, said on Tuesday he had ordered the FBI to open a criminal probe into the matter.
'Heads need to roll'
Senate Republican leader Mitch McConnell urged Obama to make all of those who knew about IRS misconduct available for questioning, and said there should be "no more stonewalling".
"Heads need to roll today," said Republican Representative Vern Buchanan, a member of the tax-writing House Ways and Means Committee, which oversees the IRS and is scheduled to hold a hearing on the scandal on Friday.
It is unclear precisely what charges a criminal probe of the IRS could yield.
Obama's administration has denied playing any role in choosing IRS audit targets, insisting that the IRS operates independently from the White House.
Obama spokesman Jay Carney said the results of independent investigations must be known "before we can jump to conclusions about what happened, whether there was a deliberate targeting of groups inappropriately and, if that's the case, what action should be taken".