WASHINGTON (AFP) - United States (US) President Barack Obama said on Tuesday that an inquiry into allegations that tax agency staff had unfairly targeted conservative groups had uncovered "intolerable and inexcusable" behaviour.

In a statement released by the White House amid a wave of outrage from the president's opponents, Mr Obama said he had ordered Treasury Secretary Jack Lew to hold "those responsible for these failures accountable."

Mr Obama said: "I have now had the opportunity to review the Treasury Department watchdog's report on its investigation of IRS personnel who improperly targeted conservative groups applying for tax-exempt status.

"And the report's findings are intolerable and inexcusable."

The inquiry into the Internal Revenue Service's conduct was launched when it was revealed that some of its agents - the extent of the controversy is yet to be made clear - had set out to target groups opposed to Mr Obama's agenda.

"The IRS must apply the law in a fair and impartial way, and its employees must act with utmost integrity. This report shows that some of its employees failed that test," Mr Obama said.

"I've directed Secretary Lew to hold those responsible for these failures accountable," he said.

Mr Obama's administration has denied playing any role in choosing IRS audit targets, insisting that the IRS operates independently from the White House, and the Justice Department has launched a separate inquiry.