A second high-ranking Internal Revenue Service (IRS) official is stepping down amid the controversy over targeting Tea Party groups.

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Joseph Grant, the acting commissioner for the agency's Tax Exempt and Government Entities division, plans to retire, according to the IRS.

An internal IRS announcement said that Grant would retire from the agency on June 3. The announcement comes one day after President Obama asked for and received the resignation of Steven Miller, the IRS's acting commissioner, who will also leave in early June.

The White House named Danny Werfel the next acting commissioner of the IRS Thursday. Werfel will join the IRS after serving as controller of the Office of Management and Budget.

Grant headed the section of the IRS charged with processing applications for tax-exempt status, which became the center of a controversy over the agency's inappropriate targeting of groups applying for exemption based on Tea Party connections.



Just last week, the IRS announced Grant's selection as commissioner of the tax-exempt division, with Miller saying he would "provide strong leadership and continuity." Grant first joined the agency in 2005.

Grant is the boss of Lois Lerner, who heads the division that deals with tax-exempt applications. Lerner set off the controversy by apologizing for the practice last Friday.

Miller had been Grant's direct supervisor, serving as deputy commissioner for services and enforcement before taking over as acting commissioner following the departure of Douglas Shulman at the end of 2012.

Grant was the IRS official who provided the official agency response to the report from a Treasury watchdog that found the IRS improperly targeted groups for added scrutiny in processing tax-exempt applications.

In his response, he acknowledged "some errors occurred," but said he was confident the matter had been rectified and there would not be a recurrence. He also said the problems stemmed from low-level employees at the IRS, not high-ranking officials.

"We believe the front line career employees that made the decisions acted out of a desire for efficiency and not out of any political or partisan viewpoint," he wrote. "These issues have been resolved."

Grant also served on the staff of the Oversight subcommittee of the House Ways and Means Committee, according to the IRS. That committee will hold the first hearing on the scandal Friday, discussing the matter with IRS officials and the Treasury's inspector general for tax administration.

—Bernie Becker contributed to this report.