Duckworth, a military veteran, responded she was "deeply disappointed" by Shulman's response, noting that soldiers serving in Afghanistan and elsewhere know "you can never delegate responsibility and that you are always responsible for the performance, the training, the actions of the men and women under you."
Others panel members accused him of failing to properly notify Congress of the problem after having testified at a hearing earlier in 2012 that no political targeting had occurred.
The targeting followed the 2010 Supreme Court decision in the Citizens United case that opened the door to increased corporate and private political spending.
Obama and Democrats warned at the time that the ruling could cause an imbalance in political spending by permitting wealthy donors to secretly fund political action groups not directly linked to candidates and parties.
Spending by such groups has increased, and Shulman testified that the increased workload on IRS officials tasked with assessing tens of thousands of new requests for tax-exempt status contributed to the targeting problem.
On Tuesday, Miller -- who succeeded Shulman as IRS commissioner last November -- admitted he helped engineer a clumsy public disclosure of the controversy through a planted question at an American Bar Association event on May 10.
The planted question prompted Lerner to apologize at the event for the targeting, which was to be made public in coming days by the release of George's report.
Miller called the planted question a "bad idea" intended to create an initial IRS apology by Lerner before the story broke with the release of the inspector general's report.
The inspector general's report concluded that the improper targeting was due to mismanagement and incorrect policy, rather than political motivation, and Miller apologized for what he called "foolish mistakes" intended to help tackle an overwhelming workload.
He argued Tuesday that the targeting resulted from overworked staffers struggling to enforce unclear regulations involving what political activity is permissible by tax-exempt groups.
"We are down a billion dollars over the last couple of years, the IRS is, and that's caused us to cut training in some areas," he said, adding that the agency deals with 70,000 applications for tax-exempt status. "Do we have the resources to get the job done. I don't believe we do at this point."
Republicans complained Wednesday that some conservative groups who sought tax exempt status still waited for an answer three years later.
George noted that one reason for such delays was the "inordinate amount of time" it took for IRS officials in Washington to provide requested guidance to workers in the agency's Cincinnati office on interpreting the federal law and regulations regarding tax exempt status.
Democratic legislators focused on the ambiguity in the tax code and IRS regulations on the matter, saying it needs to be altered. Republicans also called for tax code reforms, but with the goal of slashing the responsibilities of the agency as part of the party's longstanding push for smaller government and a reduced taxing authority.
What the White House knew
At the White House on Tuesday, spokesman Jay Carney revealed new details about the administration's response to the IRS controversy for a second straight day.
Carney told reporters that White House and Treasury officials discussed the timing of the release of the inspector general's report and its findings after General Counsel Kathryn Ruemmler learned about it on April 24 and told others, including Chief of Staff Denis McDonough.
However, Carney said Obama was deliberately kept out of any discussions on the issue to prevent any possible suspicion of presidential meddling in an upcoming report by an independent watchdog.
His comments followed Miller's disclosure earlier Tuesday about the planted question at the May 10 ABA meeting that led to Lerner's public apology to pre-empt the upcoming report from George.
Asked if the White House had any involvement in the planted question, Carney said "we were not aware of what ultimately led to the first reporting of this on May 10th."
On Monday, Carney had first revealed the date Ruemmler learned details of the upcoming report and that she told McDonough, among others. It was the first time the White House acknowledged that McDonough was aware of the report before it became public more than two weeks later.
Carney insisted no one -- including Ruemmler and McDonough -- told Obama anything about the inspector general's pending report before media reports about it began appearing on May 10.
However, the new information continuing to trickle out bolstered a perception of a White House on the defensive over the issue.
A second conservative group filed a lawsuit Tuesday against the IRS over the political targeting. True the Vote asked a federal court in Washington to grant its request for tax-exempt status that has been held up by the IRS for three years, and to award damages.
On Monday, a Northern California tea party group has filed the first lawsuit against the U.S. government stemming from the IRS targeting.