The Internal Revenue Service's targeting of conservative groups is now a criminal investigation, with the Justice Department looking into possible mis-conduct. The FBI is also stepping in to investigate.
"We are examining the facts to see if there were criminal violations," said U.S. Attorney General Eric Holder.
Central Florida Tea Party member Jason Hoyt ideological profiling should serve as a wakeup call.
"For them to target and profile organizations and individuals based on ideology should scare everyone," Hoyt said.
A new agency watchdog report blames "ineffective management" for allowing agents to target conservative groups for more than 18 months.
The report says agents were overly aggressive with more than half the targeted groups. It calls the information they asked for "irrelevant and unnecessary."
Now investigators will look into whether the IRS illegally engaged in partisan politics and whether they violated the civil rights of Tea Party and conservative groups by singling them out for extra review.
"It suggests to me there is a culture of rottenness," Rep. Charles Boustany, R-La., said. "We're going to get to the bottom of this."
President Obama called the watchdog report findings "intolerable and inexcusable."
"The IRS must apply the law in a fair and impartial way, and its employees must act with utmost integrity," the president said in a statement. "This report shows that some of its employees failed that test."
Still, the IRS continues to offer excuses for its behavior.
Officials say that while some inappropriate shortcuts were used, determining if organizations are engaging in a legally permissible level of political activity is required by law.
They even blamed some of the conservative groups, saying that their applications were too vague.
The Justice Department's investigation into the IRS could lead to jail time for those found to be complicit in the scandal. The maximum penalty for violating the civil rights statute is 10 years in prison.