Chapter 5:

What State Are You In?

Answer:

Mostly liquid, some solid, and occasional gas!

This answer is only partially facetious. In something as important as a Congressional statute, one would think that key terms like "State" would be defined so clearly as to leave no doubt about their meaning. Alas, this is not the case in the Internal Revenue Code ("IRC") brought to you by Congress. The term "State" has been deliberately defined so as to confuse the casual reader into believing that it means one of the 50 States of the Union, even though it doesn't say "50 States" in so many words. For the sake of comparison, we begin by crafting a definition which is deliberately designed to create absolutely no doubt or ambiguity about its meaning:

For the sole purpose of establishing a benchmark of clarity, the term "State" means any one of the 50 States of the Union, the District of Columbia, the territories and possessions belonging to the Congress, and the federal enclaves lawfully ceded to the Congress by any of the 50 States of the Union.

Now, compare this benchmark with the various definitions of the word "State" that are found in Black's Law Dictionary and in the Internal Revenue Code. Black's is a good place to start, because it clearly defines two different kinds of "states". The first kind of state defines a member of the Union, i.e., one of the 50 States which are united by and under the U.S. Constitution:

The section of territory occupied by one of the United States***. One of the component commonwealths or states of the United States of America.

[emphasis added]

The second kind of state defines a federal state, which is entirely different from a member of the Union:

Any state of the United States**, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession subject to the legislative authority of the United States. Uniform Probate Code, Section 1-201(40).

[emphasis added]

Notice carefully that a member of the Union is not defined as being "subject to the legislative authority of the United States". Also, be aware that there are also several different definitions of "State" in the IRC, depending on the context. One of the most important of these is found in a chapter specifically dedicated to providing definitions, that is, Chapter 79 (not exactly the front of the book). To de-code the Code, read it backwards! In this chapter of definitions, we find the following:

When used in this title, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof -- ...

(10) State. -- The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.

[IRC 7701(a)(10), emphasis added]

Already, it is obvious that this definition leaves much to be debated because it is ambiguous and it is not nearly as clear as our "established benchmark of clarity" (which will be engraved in marble a week from Tuesday). Does the definition restrict the term "State" to mean only the District of Columbia? Or does it expand the term "State" to mean the District of Columbia in addition to the 50 States of the Union? And how do we decide?

Even some harsh critics of federal income taxation, like Otto Skinner, have argued that ambiguities like this are best resolved by interpreting the word "include" in an expansive sense, rather than in a restrictive sense. To support his argument, Skinner cites the definitions of "includes" and "including" that are actually found in the Code:

Includes and Including. -- The terms "includes" and "including" when used in a definition contained in this title shall not be deemed to exclude other things otherwise within the meaning of the term defined.

[IRC 7701(c), emphasis added]

Skinner reasons that the Internal Revenue Code provides for an expanded definition of the term "includes" when it is used in other definitions contained in that Code. Using his logic, then, the definition of "State" at IRC Sec. 7701(a)(10) must be interpreted to mean the District of Columbia, in addition to other things. But what other things? Are the 50 States to be included also? What about the territories and possessions? And what about the federal enclaves ceded to Congress by the 50 States? If the definition itself does not specify any of these things, then where, pray tell, are these other things "distinctly expressed" in the Code? If these other things are distinctly expressed elsewhere in the Code, is their expression in the Code manifestly compatible with the intent of that Code? Should we include also a state of confusion to our understanding of the Code?

Quite apart from the meaning of "includes" and "including", defining the term "include" in an expansive sense leads to an absurd result that is manifestly incompatible with the Constitution. If the expansion results in defining the term "State" to mean the District of Columbia in addition to the 50 States of the Union, then these 50 States must be situated within the federal zone. Remember, the federal zone is the area of land over which the Congress has unrestricted, exclusive legislative jurisdiction. But, the Congress does not have unrestricted, exclusive legislative jurisdiction over any of the 50 States. It is bound by the chains of the Constitution in this other zone, to paraphrase Thomas Jefferson. Specifically, Congress is required to apportion direct taxes which it levies inside the 50 States. This is a key limitation on the power of Congress; it has never been expressly repealed (as Prohibition was repealed).

Unlike the Brushaber case, other federal cases can be cited to support the conclusions that taxes on "income" are direct taxes, and that the 16th Amendment actually removed this apportionment rule from direct taxes laid on "income". Sorry, but the U.S. Supreme Court is not always consistent in this area, and the Appellate Courts are even less consistent. These other cases are highly significant, if only because they provide essential evidence of other attempts by federal courts to isolate the exact effects of a ratified 16th Amendment. The following ruling by the Sixth Circuit Court of Appeals is unique, among all the relevant federal cases, for its clarity and conciseness on this question:

The constitutional limitation upon direct taxation was modified by the Sixteenth Amendment insofar as taxation of income was concerned, but the amendment was restricted to income, leaving in effect the limitation upon direct taxation of principal.

[Richardson v. United States, 294 F.2d 593, 596 (1961)]

[emphasis added]

The constitutional limitation upon direct taxes is apportionment. By inference, if income taxes were controlled by the apportionment rule prior to the 16th Amendment, then they must be direct taxes. It is not difficult to find Supreme Court decisions which arrived at similar conclusions about the 16th Amendment, long before the Richardson case:

... [I]t does not extend the taxing power to new or excepted subjects, but merely removed all occasion, which otherwise might exist, for an apportionment among the states of taxes laid on income, whether it be derived from one source or another.

[Peck & Co. v. Lowe, 247 U.S. 165 (1918)]

[emphasis added]

And, in what is arguably one of the most significant Supreme Court decisions to define the precise meaning of "income", the Eisner Court simply paraphrased the Peck decision when it attributed the exact same effect to the 16th Amendment, namely, income taxes had become direct taxes relieved of apportionment:

As repeatedly held, this did not extend the taxing power to new subjects, but merely removed the necessity which otherwise might exist for an apportionment among the States of taxes laid on income. ...

A proper regard for its genesis, as well as its very clear language, requires also that this Amendment shall not be extended by loose construction, so as to repeal or modify, except as applied to income, those provisions of the Constitution that require an apportionment according to population for direct taxes upon property, real and personal.

[Eisner v. Macomber, 252 U.S. 189, 205-206 (1919)]

[emphasis added]

Contrary to statements about it in the Brushaber decision, the earlier Pollock case, without any doubt, defined income taxes as direct taxes. It also overturned an Act of Congress precisely because that Act had levied a direct tax without apportionment:

First. We adhere to the opinion already announced, that, taxes on real estate being indisputably direct taxes, taxes on the rents or income of real estate are equally direct taxes.

Second. We are of the opinion that taxes on personal property, or on the income of personal property, are likewise direct taxes.

[Pollock v. Farmers' Loan & Trust Co.]

[158 U.S. 601 (1895), emphasis added]

Another U.S. Supreme Court decision is worthy of note, not only because it appears to attribute the exact same effect to the 16th Amendment, but also because it fails to clarify which meaning of the term "United States" is being used. The Plaintiff was Charles B. Shaffer, an Illinois Citizen and resident of Chicago:

No doubt is suggested (the former requirement of apportionment having been removed by constitutional amendment) as to the power of Congress thus to impose taxes upon incomes produced within the borders of the United States [?] or arising from sources located therein, even though the income accrues to a nonresident alien.

[Shaffer v. Carter, 252 U.S. 37, 54 (1920)]

[emphasis and question mark added]

In the Shaffer decision, it is obvious that Justice Pitney again attributed the same effect to the 16th Amendment. However, if he defined "United States" to mean the federal zone, then he must have believed that Congress also had to apportion direct taxes within that zone before the 16th Amendment was "declared" ratified. Such a belief contradicts the exclusive legislative authority which Congress exercises over the federal zone:

In exercising this power [to make all needful rules and regulations respecting territory or other property belonging to the United States**], Congress is not subject to the same constitutional limitations, as when it is legislating for the United States***.

[Hooven & Allison Co. v. Evatt, 324 U.S. 652 (1945)]

[emphasis added]

On the other hand, if Justice Pitney defined "United States" to mean the several States of the Union, he as much admits that the Constitution needed amending to authorize an unapportioned direct tax on income produced or arising from sources within the borders of those States. Unfortunately for us, Justice Pitney did not clearly specify which meaning he was using, and we are stuck trying to make sense of Supreme Court decisions which contradict each other. For example, compare the rulings in Peck, Eisner, Pollock and Shaffer (as quoted above) with the rulings in Brushaber and Stanton v. Baltic Mining Co., and also with the ruling In re Becraft (a recent Appellate case). To illustrate, the Stanton court ruled as follows:

... [T]he Sixteenth Amendment conferred no new power of taxation but simply prohibited the previous complete and plenary power of income taxation possessed by Congress from the beginning from being taken out of the category of indirect taxation to which it inherently belonged ....

[Stanton v. Baltic Mining Company, 240 U.S. 103 (1916)]

[emphasis added]

Now, contrast the Stanton decision with a relatively recent decision of the Ninth Circuit Court of Appeals in San Francisco. In re Becraft is classic because that Court sanctioned a seasoned defense attorney $2,500 for raising issues which the Court called "patently absurd and frivolous", sending a strong message to any licensed attorney who gets too close to breaking the "Code". First, the Court reduced attorney Lowell Becraft's position to "one elemental proposition", namely, that the 16th Amendment does not authorize a direct non-apportioned income tax on resident United States** citizens, and thus such citizens are not subject to the federal income tax laws. Then, the 9th Circuit dispatched Becraft's entire argument with exemplary double-talk, as follows:

For over 75 years, the Supreme Court and the lower federal courts have both implicitly and explicitly recognized the Sixteenth Amendment's authorization of a non-apportioned direct income tax on United States** citizens residing in the United States*** and thus the validity of the federal income tax laws as applied to such citizens. See, e.g., Brushaber .... [M]uch of Becraft's reply is also devoted to a discussion of the limitations of federal jurisdiction to United States** territories and the District of Columbia and thus the inapplicability of the federal income tax laws to a resident of one of the states*** [from footnote 2].

[In re Becraft, 885 F.2d 547, 548 (1989)]

[emphasis added]

Here, the 9th Circuit credits the 16th Amendment with authorizing a non-apportioned direct tax, completely contrary to Brushaber. Then, the term "United States" is used two different ways in the same sentence; we know this to be true because a footnote refers to "one of the [50] states". The Court also uses the term "resident" to mean something different from the statutory meaning of "resident" and "nonresident", thus exposing another key facet of their fraud (see Chapter 3). Be sure to recognize what's missing here, namely, any mention whatsoever of State Citizens.

For the lay person, doing this type of comparison is a daunting if not impossible task, and demonstrates yet another reason why federal tax law should be nullified for vagueness, if nothing else. If Appellate and Supreme Court judges cannot be clear and consistent on something as fundamental as a constitutional amendment, then nobody can. And their titles are Justice. Are you in the State of Confusion yet?

When it comes to federal income taxes, we are thus forced to admit the existence of separate groups of Supreme Court decisions that flatly contradict each other. One group puts income taxes into the class of indirect taxes; another group puts them into the class of direct taxes. One group argues that a ratified 16th Amendment did not change or repeal any other clause of the Constitution; another group argues that it relieved income taxes from the apportionment rule. Even experts disagree. To illustrate the wide range of disagreement on such fundamental constitutional issues, consider once again the conclusion of legal scholar Vern Holland, quoted in a previous chapter:

[T]he Sixteenth Amendment did not amend the Constitution. The United States Supreme Court by unanimous decisions determined that the amendment did not grant any new powers of taxation; that a direct tax cannot be relieved from the constitutional mandate of apportionment; and the only effect of the amendment was to overturn the theory advanced in the Pollock case which held that a tax on income, was in legal effect, a tax on the sources of the income.

[The Law That Always, page 220]

[emphasis added]

Now consider an opposing view of another competent scholar. After much research and much litigation, author and attorney Jeffrey A. Dickstein offers the following concise clarification:

A tax imposed on all of a person's annual gross receipts is a direct tax on personal property that must be apportioned. A tax imposed on the "income" derived from those gross receipts is also a direct tax on property, but as a result of the Sixteenth Amendment, Congress no longer has to enact legislation calling for the apportionment of a tax on that income.

[Judicial Tyranny and Your Income Tax, pages 60-61]

[emphasis added]

Recall now that 17,000 State-certified documents have been assembled to prove that the 16th Amendment was never ratified. As a consistent group, the Pollock, Peck, Eisner and Richardson decisions leave absolutely no doubt about the consequences of the failed ratification: the necessity still exists for an apportionment among the 50 States of all direct taxes, and income taxes are direct taxes. Using common sense as our guide, an expansive definition of "include" results in defining the term "State" to mean the District of Columbia in addition to the 50 States. This expansive definition puts the 50 States inside the federal zone, where Congress has no restrictions on its exclusive legislative jurisdiction. But, just a few sentences back, we proved that the rule of apportionment still restrains Congress inside the 50 States. This is an absurd result: it is not possible for the restriction to exist, and not to exist, at the same time, in the same place, for the same group of people, for the same laws, within the same jurisdiction. Congress cannot have its cake and eat it too, as much as it would like to! Absurd results are manifestly incompatible with the intent of the IRC (or so we are told).

Other problems arise from Skinner's reasoning. First of all, like so much of the IRC, the definitions of "includes" and "including" are outright deceptions in their own right. A grammatical approach can be used to demonstrate that these definitions are thinly disguised tautologies. Note, in particular, where the Code states that these terms "shall not be deemed to exclude other things". This is a double negative. Two negatives make a positive. This phrase, then, is equivalent to saying that the terms "shall be deemed to include other things". Continuing with this line of reasoning, the definition of "includes" includes "include", resulting in an obvious tautology. (We just couldn't resist.) Forgive them, for they know not what they do.

The definitions of "includes" and "including" can now be rewritten so as to "include other things otherwise within the meaning of the term defined". So, what things are otherwise within the meaning of the term "State", if those things are not distinctly expressed in the original definition? You may be dying to put the 50 States of the Union among those things that are "otherwise within the meaning of the term", but you are using common sense. The Internal Revenue Code was not written with common sense in mind; it was written with deception in mind. The rules of statutory construction apply a completely different standard. Author Ralph Whittington has this to say about the specialized definitions that are exploited by lawyers, attorneys, lawmakers, and judges:

The Legislature means what it says. If the definition section states that whenever the term "white" is used (within that particular section or the entire code), the term includes "black," it means that "white" is "black" and you are not allowed to make additions or deletions at your convenience. You must follow the directions of the Legislature, NO MORE -- NO LESS.

[Omnibus, Addendum II, p. 2]

Unfortunately for Otto Skinner and others who try valiantly to argue the expansive meaning of "includes" and "including", Treasury Decision No. 3980, Vol. 29, January-December 1927, and some 80 court cases have adopted the restrictive meaning of these terms:

The supreme Court of the State ... also considered that the word "including" was used as a word of enlargement, the learned court being of the opinion that such was its ordinary sense. With this we cannot concur. It is its exceptional sense, as the dictionaries and cases indicate.

[Montello Salt Co. v. State of Utah, 221 U.S. 452 (1911)]

[emphasis added]

An historical approach yields similar results. Without tracing the myriad of income tax statutes which Congress has enacted over the years, it is instructive to examine the terminology found in a revenue statute from the Civil War era. The definition of "State" is almost identical to the one quoted from the current IRC at the start of this chapter. On June 30, 1864, Congress enacted legislation which contained the following definition:

The word "State," when used in this Title, shall be construed to include the Territories and the District of Columbia, where such construction is necessary to carry out its provisions.

[Title 35, Internal Revenue, Chapter 1, page 601]

[Revised Statutes of the United States**]

[43rd Congress, 1st Session, 1873-74]

Aside from adding "the Territories", the two definitions are nearly identical. The Territories at that point in time were Washington, Utah, Dakota, Nebraska, Colorado, New Mexico, and the Indian Territory.

One of the most fruitful and conclusive methods for establishing the meaning of the term "State" in the IRC is to trace the history of changes to the United States Codes which occurred when Alaska and Hawaii were admitted to the Union. Because other authors have already done an exhaustive job on this history, there is no point in re-inventing their wheels here.

It is instructive to illustrate these Code changes as they occurred in the IRC definition of "State" found at the start of this chapter. The first Code amendment became effective on January 3, 1959, when Alaska was admitted to the Union:

Amended 1954 Code Sec. 7701(a)(10) by striking out "Territories", and by substituting "Territory of Hawaii".

[IRC 7701(a)(10)]

The second Code amendment became effective on August 21, 1959, when Hawaii was admitted to the Union:

Amended 1954 Code Sec. 7701(a)(10) by striking out "the Territory of Hawaii and" immediately after the word "include".

[IRC 7701(a)(10)]

Applying these code changes in reverse order, we can reconstruct the IRC definitions of "State" by using any word processor and simple "textual substitution" as follows:

Time 1: Alaska is a U.S.** Territory

Hawaii is a U.S.** Territory

7701(a)(10): The term "State" shall be construed to include the Territories and the District of Columbia, where such construction is necessary to carry out provisions of this title.

Alaska joins the Union. Strike out "Territories" and substitute "Territory of Hawaii":

Time 2: Alaska is a State of the Union

Hawaii is a U.S.** Territory

7701(a)(10): The term "State" shall be construed to include the Territory of Hawaii and the District of Columbia, where such construction is necessary to carry out provisions of this title.

Hawaii joins the Union. Strike out "the Territory of Hawaii and" immediately after the word "include":

Time 3: Alaska is a State of the Union

Hawaii is a State of the Union

7701(a)(10): The term "State" shall be construed to include the District of Columbia, where such construction is necessary to carry out provisions of this title.

Author Lori Jacques has therefore concluded that the term "State" now includes only the District of Columbia, because the former Territories of Alaska and Hawaii have been admitted to the Union, Puerto Rico has been granted the status of a Commonwealth, and the Philippine Islands have been granted their independence (see United States Citizen versus National of the United States, page 9, paragraph 5). It is easy to see how author Lori Jacques could have overlooked the following reference to Puerto Rico, found near the end of the IRC:

Commonwealth of Puerto Rico. -- Where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, references in this title to possessions of the United States** shall be treated as also referring to the Commonwealth of Puerto Rico.

[IRC 7701(d)]

In order to conform to the requirements of the Social Security scheme, a completely different definition of "State" is found in the those sections of the IRC that deal with Social Security. This definition was also amended on separate occasions when Alaska and Hawaii were admitted to the Union. The first Code amendment became effective on January 3, 1959, when Alaska was admitted:

Amended 1954 Code Sec. 3121(e)(1), as it appears in the amendment note for P.L. 86-778, by striking out "Alaska," where it appeared following "includes".

[IRC 3121(e)(1)]

The second Code amendment became effective on August 21, 1959, when Hawaii was admitted to the Union:

Amended 1954 Code Sec. 3121(e)(1), as it appears in the amendment note for P.L. 86-778, by striking out "Hawaii," where it appeared following "includes".

[IRC 3121(e)(1)]

Applying these code changes in reverse order, as above, we can reconstruct the definitions of "State" in this section of the IRC as follows:

Time 1: Alaska is a U.S.** Territory

Hawaii is a U.S.** Territory

3121(e)(1): The term "State" includes Alaska, Hawaii, the District of Columbia, Puerto Rico, and the Virgin Islands.

Alaska joins the Union. Strike out "Alaska," where it appeared following "includes":

Time 2: Alaska is a State of the Union

Hawaii is a U.S.** Territory

3121(e)(1): The term "State" includes Hawaii, the District of Columbia, Puerto Rico, and the Virgin Islands.

Hawaii joins the Union. Strike out "Hawaii," where it appeared following "includes":

Time 3: Alaska is a State of the Union

Hawaii is a State of the Union

3121(e)(1): The term "State" includes the District of Columbia, Puerto Rico, and the Virgin Islands.

Puerto Rico becomes a Commonwealth. For services performed after 1960, Guam and American Samoa are added to the definition:

Time 4: Puerto Rico becomes a Commonwealth

Guam and American Samoa join Social Security

3121(e)(1): The term "State" includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.

Notice carefully how Alaska and Hawaii only fit these definitions of "State" before they joined the Union. It is most revealing that these Territories became States when they were admitted to the Union, and yet the United States Codes had to be changed because Alaska and Hawaii were defined in those Codes as "States" before admission to the Union, but not afterwards. This apparent anomaly is perfectly clear, once the legal and deliberately misleading definition of "State" is understood. The precise history of changes to the Internal Revenue Code is detailed in Appendix B of this book. The changes made to the United States Codes when Alaska joined the Union were assembled in the Alaska Omnibus Act. The changes made to the federal Codes when Hawaii joined the Union were assembled in the Hawaii Omnibus Act.

The following table summarizes the sections of the IRC that were affected by these two Acts:

IRC Section Alaska Hawaii

changed: joins: joins:

----------- ------ ------

2202 X X

3121(e)(1) X X

3306(j) X X

4221(d)(4) X X

4233(b) X X

4262(c)(1) X X

4502(5) X X

4774 X X

7621(b) X <-- Note!

7653(d) X X

7701(a)(9) X X

7701(a)(10) X X

Section 7621(b) sticks out like a sore thumb when the changes are arrayed in this fashion. The Alaska Omnibus Act modified this section of the IRC, but the Hawaii Omnibus Act did not. Let's take a close look at this section and see if it reveals any important clues:

Sec. 7621. Internal Revenue Districts.

(a) Establishment and Alteration. -- The President shall establish convenient internal revenue districts for the purpose of administering the internal revenue laws. The President may from time to time alter such districts.

[IRC 7621(a)]

Now witness the chronology of amendments to IRC Section 7621(b), entitled "Boundaries", as follows:

Time 1: Alaska is a U.S.** Territory.

<1/3/59 Hawaii is a U.S.** Territory. ("<" means "before")

7621(b): Boundaries. -- For the purpose mentioned in subsection (a), the President may subdivide any State, Territory, or the District of Columbia, or may unite two or more States or Territories into one district.

Time 2: Alaska is a State of the Union.

1/3/59 Hawaii is a U.S.** Territory.

7621(b): Boundaries. -- For the purpose mentioned in subsection (a), the President may subdivide any State, Territory, or the District of Columbia, or may unite into one District two or more States or a Territory and one or more States.

Time 3: Alaska is a State of the Union.

2/1/77 Hawaii is a State of the Union.

7621(b): Boundaries. -- For the purpose mentioned in subsection (a), the President may subdivide any State or the District of Columbia, or may unite into one district two or more States.

The reason why the Hawaii Omnibus Act did not change section 7621(b) is not apparent from reading the statute, nor has time permitted the research necessary to determine why this section was changed in 1977 and not in 1959. After Alaska joined the Union, Hawaii was technically the only remaining Territory. This may explain why the term "Territories" was changed to "Territory" at Time 2 above. However, this is a relatively minor matter, when compared to the constitutional issue that is involved here. There is an absolute constitutional restriction against subdividing or joining any of the 50 States, or any parts thereof, without the consent of Congress and of the Legislatures of the States affected. This restriction is very much like the restriction against direct taxes within the 50 States without apportionment:

New States may be admitted by the Congress into this Union; but no new State shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.

[Constitution for the United States of America]

[Article 4, Section 3, Clause 1, emphasis added]

This point about new States caught the keen eye of author and scholar Eustace Mullins. In his controversial and heart-breaking book entitled A Writ for Martyrs, Mullins establishes the all-important link between the Internal Revenue Service and the Federal Reserve System, and does so by charging that Internal Revenue Districts are "new states" unlawfully established within the jurisdiction of legal States of the Union, as follows:

The income tax amendment and the Federal Reserve Act were passed in the same year, 1913, because they function as an essential team, and were planned to do so. The Federal Reserve districts and the Internal Revenue Districts are "new states," which have been established within the jurisdiction of legal states of the Union.

[see Appendix "I", page I-12, emphasis added]

Remember, the federal zone is the area of land over which the Congress exercises an unrestricted, exclusive legislative jurisdiction. The Congress does not have unrestricted, exclusive legislative jurisdiction over any of the 50 States. It is bound by the chains of the Constitution. This point is so very important, it bears repeating throughout the remaining chapters of this book. As in the apportionment rule for direct taxes and the uniformity rule for indirect taxes, Congress cannot join or divide any of the 50 States without the explicit approval of the Legislatures of the State(s) involved. This means that Congress cannot unilaterally delegate such a power to the President. Congress cannot lawfully exercise (nor delegate) a power which it simply does not have.

How, then, is it possible for section 7621(b) of the IRC to give this power to the President? The answer is very simple: the territorial scope of the Internal Revenue Code is the federal zone. The IRC only applies to the land that is internal to that zone. Indeed, a leading legal encyclopedia leaves no doubt that the terms "municipal law" and "internal law" are equivalent:

International law and Municipal or internal law.

... [P]ositive law is classified as international law, the law which governs the interrelations of soverign states, and municipal law, which is, when used in contradistinction to international law, the branch of the law which governs the internal affairs of a sovereign state.

However, the term "municipal law" has several meanings, and in order to avoid confusing these meanings authorities have found more satisfactory Bentham's phrase "internal law," this being the equivalent of the French term "droit interne," to express the concept of internal law of a sovereign state.

The phrase "municipal law" is derived from the Roman law, and when employed as indicating the internal law of a sovereign state the word "municipal" has no specific reference to modern municipalities, but rather has a broader, more extensive meaning, as discussed in the C.J.S. definition Municipal.

[52A C.J.S. 741, 742 ("Law")]

[emphasis added]