The Federal Bureau of Investigation (FBI) has its eye on the Internal Revenue Service (IRS).

Yesterday, Attorney General Eric Holder announced that he has launched a criminal investigation into the IRS’ flagging of conservative groups for extra scrutiny when they applied for tax-exempt status. Last week, the IRS admitted to and apologized for flagging about 300 groups with the words “tea party” or “patriot” in their names for extra scrutiny. The flagging took place during the 2012 election campaigns, but the agency maintains that its actions weren’t politically motivated.

According to a report the Treasury Inspector General for Tax Administration released yesterday, the IRS’ managers allowed the practices to continue for more than a year and a half. President Obama called the findings “intolerable and inexcusable” and has promised to hold any wrongdoers in the IRS accountable for their actions.

At a press conference, Holder told reporters that the IRS’ actions were “if not criminal, they were certainly outrageous and unacceptable, but we are examining the facts to see if there were criminal violations.”

Capitol Hill conservatives are calling for the resignation of the IRS’ acting commissioner, Steven Miller, and the head of the agency’s tax-exempt organizations office, Lois Lerner. Miller is attending meetings on Capitol Hill concerning the scandal.

Read the Huffington Post, Reuters the Wall Street Journal for more about the IRS investigation.

For more InsideCounsel coverage of the IRS and non-profits, read:

IRS apologizes for scrutinizing conservative groups

The division of the IRS responsible for tax exemptions has failed to do its job

A proposal to overhaul tax-exempt law

The last political loophole is found in non-profits