... let's start out with the fact that you got it wrong: there is no aspect about this story that has the "government going after its own citizens".... it has to do with the IRS using "tea party" as a selection tool to better scrutinize 501(c)(4) applications. The 504(c)(4) is a designation used for Civic Leagues, Social Welfare Organizations, and Local Associations of Employees, that allows them tax exempt status so long as the primary purpose is not political. The IRS determined that Tea Party organizations might actually be "primarily" political, and thus selected them for scrutiny.
501(c) organization - Wikipedia, the free encyclopedia
You have the default right to declare yourself as a 501(c)(4), pending IRS approval. The IRS denied no one this status, so therefore, in reality there was no harm and thus no foul.
This is yet one more example of Republicans making a ton of noise about nothing to obfuscate the reality that their core political political program is an empty suit; devoid of ideas.
Calling this on the level of Watergate shows ignorance of either this issue, Watergate (or both), or just a simple, unhealthy obsession with finding some dirt on Obama.