The nation's top tax collector resigned Wednesday amid controversy over Internal Revenue Service targeting of conservative groups that applied for federal tax-exempt status.
The official, acting IRS Commissioner Steven Miller, was aware employees were targeting conservative groups in May 2012, according to the agency.
But Miller, then the agency's deputy commissioner, didn't tell Congress about it when he testified before an oversight committee in July -- despite being questioned on the issue. He was named acting commissioner in November.
An administration official told CNN on Thursday that Obama will appoint a new acting commissioner this week.
Announcing the resignation to reporters Wednesday, President Barack Obama said the agency's misconduct was "inexcusable."
"Americans have a right to be angry about it, and I'm angry about it," Obama said.
"It should not matter what political stripe you're from. The fact of the matter is, the IRS has to operate with absolute integrity," the president said.
Obama pledged to work "hand in hand" with Congress as it investigates the matter, and vowed new safeguards will be put in place at the IRS so that "this doesn't happen again."
Despite his resignation, Miller is expected to testify Friday at a hearing before the House Ways and Means Committee, according to a source familiar with the proceedings.
In an internal message to IRS employees obtained by CNN, Miller said he would be stepping down as commissioner in early June.
"This has been an incredibly difficult time for the IRS given the events of the past few days, and there is a strong and immediate need to restore public trust in the nation's tax agency," Miller wrote.
News of Miller's resignation followed revelations that the IRS has identified two "rogue" employees in the agency's Cincinnati office as being principally responsible for the "overly aggressive" handling of requests by conservative groups for tax-exempt status, a congressional source told CNN.
Miller said the staffers have already been disciplined, according to another source familiar with Miller's discussions with congressional investigators. The second source said Miller emphasized that the problem with IRS handling of tax-exempt status for tea party groups was not limited to these two employees.
Miller met with Senate Finance Committee Chairman Max Baucus of Montana on Tuesday to discuss an appearance before Congress.
Asked Wednesday in a Senate hallway about his meeting with Miller, Baucus told CNN, "I did not learn as much from the meeting as I would have liked."
"I told him that it was in his best interest to be totally cooperative -- that it's often the cover-up that causes more problems than the original malfeasance," the senator said. "And just to be totally straight with me and everybody, and he said he would."
Meanwhile, Republican congressional leaders on Wednesday accused Obama's administration of potentially criminal behavior in the handling of requests for tax-exempt status from conservative groups.
Senate Republican Leader Mitch McConnell suggested criminal behavior had occurred, saying that the "very serious" allegations involve "an effort to bring the power of the federal government to bear on those the administration disagreed with in the middle of a heated national election."
"It actually could be, could be criminal and we are determined to get the answers," McConnell said.
House Speaker John Boehner was more definitive.
"My question is, who's going to jail over this scandal?" he asked.
Boehner told reporters that "clearly someone violated the law" in what an IRS inspector general's report described as delayed processing of applications by groups associated with the political right wing.
U.S. Attorney General Eric Holder, who ordered a criminal investigation into the situation, said Wednesday at a congressional hearing that investigators will look at the conduct of IRS offices nationwide.