WASHINGTON - Attorney General Eric Holder said Tuesday that the Justice Department and the FBI began the investigation after the Internal Revenue Service acknowledged that it selected groups with the words "tea party" and "patriot" in their names for special reviews.
"We are examining the facts to see if there were criminal violations," Holder said at a news conference.
Also Tuesday, a widely anticipated report by the IRS's watchdog described the agency's tax-exempt unit - where the screening of conservative groups occurred - as a bureaucratic mess, with some employees ignorant about tax laws, defiant of their supervisors and blind to the appearance of impropriety.
The report by the Treasury Inspector General for Tax Administration described in detail the use of "inappropriate criteria" to screen political advocacy groups. Organizations faced months of delays in getting their applications approved.
President Barack Obama on Tuesday called the report's findings "intolerable and inexcusable," adding that he has directed Treasury Secretary Jack Lew "to hold those responsible for these failures accountable."
IRS officials told the inspector general that they had used the keywords as shorthand to efficiently manage a deluge of new political advocacy groups, but that explanation was rejected by the inspector general's office.
The report did not find evidence that the actions were motivated by partisan interests. IRS officials told investigators they did not consult anyone outside the agency about the screening.
The watchdog report is likely to stoke growing outrage over the agency's actions. No IRS employees involved in the decisions have been disciplined and one has been promoted, said House Oversight and Government Committee Chairman Darrel Issa, R-Calif., whose panel prompted the audit.