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Obama picks budget official to run IRS

WASHINGTON -- President Barack Obama rejected calls for a special prosecutor to investigate the Internal Revenue Service's targeting of conservative groups and named a senior White House budget official yesterday to become the acting head of the agency.

Obama said probes launched in the past week by the Justice Department and three congressional committees should be enough to pinpoint blame. "Between those investigations, I think we're going to be able to figure out exactly what happened, who was involved, what went wrong, and we're going to be able to implement steps to fix it," Obama said at a Rose Garden news conference.

Obama promised to work with Congress in its investigations, and he reiterated that he did not know conservative groups were targeted until it became public last Friday.

"I promise you this, that the minute I found out about it, then my main focus was making sure that we get the thing fixed," Obama said. "I'm outraged by this in part because, look, I'm a public figure, if a future administration is starting to use the tax laws to favor one party over another or one political view over another, obviously, we're all vulnerable."

Obama named Daniel Werfel as the acting IRS commissioner to replace Steven Miller, who was forced to resign Wednesday amid the growing scandal.

More changes in the IRS leadership team were announced Thursday, with Joseph Grant, commissioner of Tax Exempt/Government Entities Division, planning to retire on June 3, The Washington Post reported.

Werfel, 42, who currently serves as controller of the Office of Management and Budget, agreed to serve through the end of September, the White House said. Presumably, Obama will nominate a new commissioner by then.

IRS commissioners serve five-year terms and must be confirmed by the Senate. Werfel won't need Senate approval because he is a temporary appointment.

Werfel takes over an agency in crisis. The IRS apologized last week for improperly targeting conservative political groups for additional, sometimes burdensome scrutiny when they applied for tax-exempt status. The practice went on more than 18 months, diminishing the ability of these groups to raise money during election cycles in 2010 and 2012, said an inspector general's report released this week.

The report did not indicate that Washington initiated the targeting of conservative groups. But it did blame ineffective management in Washington for allowing it to happen.

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