U.S. Rep. Michele Bachmann says the IRS targeting of Tea Party and conservative groups that sought tax-exempt status during the 2012 election cycle is "far worse" than the Watergate scandal of the Nixon presidency.

During a news conference Thursday on Capitol Hill, Bachmann and other Tea Party leaders demanded a thorough investigation of the IRS and the Obama administration's possible role in the controversy surrounding the agency's singling out of groups with the words "Tea Party" or "patriot" in their applications seeking federal tax-exempt status.

"This is far worse than Watergate," said Bachmann, chairwoman of the House Tea Party Caucus. "These are not political enemies. These are direct actions taken against American citizens who sought to exercise their free speech rights."

The IRS said that roughly 75 groups were targeted during an 18-month period that ended in summer 2012. Officials with the Rochester Tea Party Patriots in southern Minnesota said the IRS took more than two years to approve their tax-exempt status.

"Progressive liberal groups in line with the administration were fast-tracked … where the Tea Party groups were told to sit in the corner and on the curb and they were denied or delayed," she said.

The congresswoman said constituents in her district, Minnesota's most conservative, have called for the impeachment of President Obama. She stopped short of supporting the push, saying "we can't rush to conclusions."

On Friday, Republican U.S. Rep. Erik Paulsen and other members of the House Ways and Means Committee, which oversees tax laws, will have the first crack at questioning outgoing Acting IRS Commissioner Steven T. Miller and the agency's chief inspector.

"We are going to begin to peel back the onion to get the facts," Paulsen said in a radio interview this week. "This is the first hearing, but it won't be the last."

Dan McGrath, president of conservative nonprofit Minnesota Majority, said the IRS targeted his group this spring, requesting more than seven years of data as part of a "compliance check."

Not all conservative groups were subject to scrutiny. The American Action Network, a group led by former Minnesota U.S. Sen. Norm Coleman, had its tax-exempt application approved in less than six weeks, said Citizens for Responsibility and Ethics in Washington (CREW), a D.C.-based watchdog group.

Political battle

Democrats and Republicans are trying to spin the scandal to their advantage.

The National Republican Congressional Committee ran online ads in the districts of seven House Democrats, including Minnesota Reps. Rick Nolan, Collin Peterson and Tim Walz, trying to link them to the IRS scandal and asking them to condemn the agency's behavior. Peterson, Walz and Nolan released statements calling for investigations.

U.S. Sen. Al Franken said the people responsible for the targeting should be held accountable. He and U.S. Rep. Keith Ellison are among the Democrats arguing that all tax-exempt social welfare groups should undergo audits.

"It just should be done in a completely nonpartisan way," Franken said during a CNN interview.

Ellison and Franken are fervent critics of the Supreme Court's Citizens United decision, which eased restrictions on money in politics. By failing to distinguish between "social welfare" nonprofits and political groups, the IRS has shirked its responsibility, Ellison said in a MSNBC interview this week.

"The IRS should get more engaged, not less," Ellison said. "We need to redouble our effort to bring real campaign finance forward."

The controversy has also served as a rallying point for the Tea Party, which began in 2009 as an anti-tax and anti-government spending movement.

Last April, Bachmann and U.S. Rep. John Kline were among the Republican House members who signed a letter to then-IRS Commission Douglas Shulman, urging the agency to halt its disparate treatment of conservative groups. Then the agency denied the practice.

The IRS did not reject the applications of any of the groups singled out for scrutiny, but some are still pending and several withdrew from the process after facing additional requests for information, including the political affiliation of members and the names of donors.

"We don't know how much impact that had on the outcome of the last election, but we aim to find out," Bachmann said.

Staff writer Rachel Stassen-Berger contributed to this report.

Corey Mitchell is a correspondent in the Star Tribune Washington Bureau. Twitter: @C_C_Mitchell.