MINNEAPOLIS - The Internal Revenue Service is known and disliked for digging deeper into people's finances.
Now, federal investigators will be digging into the IRS.
"Anybody who has broken the law will be held accountable," Attorney General Eric Holder told members of the House Judiciary Committee Wednesday.
Holder detailed to lawmakers how IRS employees may have violated the law when they targeted conservative groups seeking tax exempt status. Holder says the FBI's criminal investigation of the IRS could involve potential civil rights violations among other things.
An Inspector General report blamed ineffective management at the IRS and rogue workers.
The Justice Department has launched a criminal investigation.
"It seemed to me that there was a need for a review given the potential criminal investigations that exist," says Holder.
Many are now questioning how the IRS does business.
Minneapolis attorney Jeffrey Peterson specializes in taxation issues and tax deferral through his company Commercial Partners and teaches tax law at William Mitchell College of Law.
He says this current controversy raises concerns about IRS decisions, not only related to groups seeking tax exempt status, but individuals and businesses, especially when it comes to audits.
"We can't have the most feared, powerful government agency, the IRS, acting in an arbitrary and politically motivated fashion," says Peterson.
We took at look at the IRS web site to see how the agency determines who gets audited and who doesn't.
The IRS says it compares tax returns to "norms" for similar returns, but doesn't define those norms, making it hard to know for sure what flags the IRS is looking for.
"They don't want us to know the secret sauce of how they choose and pick to audit people," says Peterson.
Holder says the FBI's criminal investigation of the IRS could involve potential civil rights violations, false statements and potential violations of the federal ban on some partisan political activities by federal employees.
He told the House Judiciary Committee that the investigation won't be about parties or about ideologies.
President Barack Obama says the acting commissioner of the Internal Revenue Service, Steven Miller, has submitted his resignation.
Obama says Treasury Secretary Jacob Lew requested Miller's resignation. Miller will step down from his post in June.
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