A report by the IRS's own watchdog shows senior IRS officials, including the acting commissioner, knew about the agency's targeting of conservative groups, making it clear that efforts went well beyond the branch initially blamed.
    
Committees from both the House and Senate vowed to investigate.

"When you use the IRS in this fashion, you're basically limiting free speech and that's not good for any of us," said Cecil Cavanaugh of the Tea Party of Louisiana.

Complaints of harassment by conservative groups around the country have been raising concerns about the IRS.

"They wanted to know very specific details concerning people who came to our meetings, people who spoke," Carol Waddell of the Waco Tea Party said.

"How many emails did you send? What were they? How many rallies did you go to?" Jennifer Stefano of Americans for Prosperity recalled. "It had a chilling effect on all of us."

A North Carolina man says his Tea Party group qualified right away in 2009 for tax-exempt status, but then authorities began targeting his personal finances.          

"I have a squeaky clean record and all of a sudden I get audited," he said.

The American Center for Law and Justice represents several Tea Party groups in their cases against the government. They're demanding immediate tax-exempt status for the 10 remaining groups and disciplinary measures for every IRS employee involved in the scandal.

In an official letter to the IRS, the ACLJ said the agency is expected to remain politically neutral and enforce the law with integrity and evenhandedness.     

They say the scandal brings into question the IRS's ability to implement Obamacare.

Following is an excerpt from the ACLJ letter:

"It is no wonder that, in light of the open and notorious politicization of the IRS vis-à-vis Tea Party and no other conservative groups, many Americans view with outright alarm the called-for expansion of the IRS to implement the Affordable Care Act (Obamacare)." 

President Obama spoke out about the growing scandal, calling a biased IRS "outrageous."

"I've got no patience with it," the president said. "I will not tolerate it. And we'll make sure that we find out exactly what happened on this."

Members of Congress want to know why they weren't told earlier about the IRS targeting conservative groups. They're expected to grill acting IRS chief Steven Miller on Friday when he appears before the House Ways and Means Committee.