                           Chapter 4:
                     The Three United States
                                
                                
     In the  previous chapter,  a handy  matrix was  developed to
organize the  key terms  which define  the concepts of status and
jurisdiction as  they apply  to  federal  income  taxation.    In
particular, an  alien is  any individual  who  is  not  a  United
States** citizen.   The  term "citizen" has a specific meaning in
the regulations which promulgate the Internal Revenue Code (IRC):


     Every person  born or  naturalized in  the United States and
     subject to its jurisdiction is a citizen.

                                [26 CFR 1.1-1(c), emphasis added]

     What, then, is meant by the term "United States" and what is
meant by  the phrase  "its jurisdiction"?  In this regulation, is
the term  "United States"  a singular phrase, a plural phrase, or
is it  both?   The astute  reader has  already  noticed  that  an
important clue  is given  by regulations which utilize the phrase
"its jurisdiction".   The term "United States" in this regulation
must be a singular phrase, otherwise the regulation would need to
utilize the  phrase "their jurisdiction" or "their jurisdictions"
to be grammatically correct.

     As early  as the  year 1820,  the  U.S.  Supreme  Court  was
beginning to  recognize  that  the  term  "United  States"  could
designate either  the whole,  or  a  particular  portion  of  the
American empire.   In  a case which is valuable, not only for its
relevance to federal taxation but also for its terse and discrete
logic,  Chief   Justice  Marshall  exercised  his  characteristic
brilliance in the following passage:

     The power,  then, to  lay and  collect duties,  imposts, and
     excises, may  be exercised, and must be exercised throughout
     the United  States.   Does this term designate the whole, or
     any particular  portion of  the American  empire?  Certainly
     this question  can admit  of but one answer.  It is the name
     given to our great republic, which is composed of states and
     territories.   The District  of Columbia,  or the  territory
     west of  the Missouri, is not less within the United States*
     than Maryland or Pennsylvania ....

                  [Loughborough vs Blake, 15 U.S. (5 Wheat.) 317]
                              [5 L.Ed. 98 (1820), emphasis added]


By 1945,  the year  of the first nuclear war on planet Earth, the
Supreme Court had come to dispute Marshall's singular definition,
but most  people were  too distracted  to notice.  The high Court
confirmed that  the term  "United States" can and does mean three
completely different things, depending on the context:


                        Page 4 - 1 of 12

                                                The Federal Zone:


     The term  "United States"  may be used in any one of several
     senses.    It  may  be  merely  the  name  of  a  sovereign*
     occupying the position analogous to that of other sovereigns
     in the  family of  nations.   It may designate the territory
     over which  the sovereignty  of the United States** extends,
     or it  may be the collective name of the states*** which are
     united by and under the Constitution.

             [Hooven & Allison Co. vs Evatt, 324 U.S. 652 (1945)]
                                                 [emphasis added]
                                                                 
     In the  first sense,  the term "United States*" can refer to
the nation,  or the  American empire,  as Justice Marshall called
it.   The "United  States*" is  one member of the United Nations.
When you  are travelling  overseas, you  would go  to  the  U.S.*
embassy for  help with passports and the like.  In this instance,
you would  come under  the jurisdiction of the President, through
his agents in the U.S.* State Department, where "U.S.*" refers to
the sovereign  nation.   The Informer  summarizes Citizenship  in
this "United States*" as follows:


     1.   I am  a Citizen  of the  United States*  like you are a
     Citizen of  China.   Here you  have defined  yourself  as  a
     National from a Nation with regard to another Nation.  It is
     perfectly OK  to call  yourself a  "Citizen  of  the  United
     States*."   This is  what everybody  thinks the tax statutes
     are inferring.   But  notice the  capital "C" in Citizen and
     where it is placed.  Please go back to basic English.

                    [Which One Are You?, page 11, emphasis added]


     Secondly, the  term "United States**" can also refer to "the
federal zone",  which is  a separate  nation-state over which the
Congress has exclusive legislative jurisdiction.  (See Appendix Y
for a  brief history describing how this second meaning evolved.)
In this  sense, the  term "United States**" is a singular phrase.
It would  be proper, for example, to say, "The United States** is
..." or  "Its jurisdiction  is ..."  and so  on.    The  Informer
describes citizenship in this United States** as follows:


     2.   I am  a United States** citizen.  Here you have defined
     yourself as  a person  residing in the District of Columbia,
     one of  its Territories,  or Federal enclaves (area within a
     Union State)  or living abroad, which could be in one of the
     States of the Union or a foreign country.  Therefore you are
     possessed by  the entity  United States** (Congress) because
     citizen is  small case.   Again  go back  to  basic  english
     [sic].   This is  the "United States**" the tax statutes are
     referring to.   Unless  stated otherwise,  such  as  26  USC
     6103(b)(5).
                    [Which One Are You?, page 11, emphasis added]


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                                          The Three United States


     Thirdly, the  term "United  States***" can  refer to  the 50
sovereign States  which are united under the Constitution for the
United States  of America.  In this third sense, the term "United
States***"  does  not  include  the  federal  zone,  because  the
Congress does  not have  exclusive legislative authority over any
of the 50 sovereign States of the Union.  In this sense, the term
"United States***"  is a  plural, collective  term.   It would be
proper therefore  to say, "These United States***" or "The United
States*** are ..." and so on.  The Informer completes the trio by
describing Citizenship in these "United States***" as follows:


     3.   I am  a Citizen  of these  United States***.   Here you
     have defined  yourself as  a Citizen  of all  the 50  States
     united by and under the Constitution.  You are not possessed
     by the  Congress (United  States**).  In this way you have a
     national domicile,  not a  State or United States** domicile
     and are not subject to any instrumentality or subdivision of
     corporate governmental entities.

                [Which One Are You?, pages 11-12, emphasis added]


     It is  very important  to note  the careful  use of the word
"sovereign" by  Chief Justice  Stone in  the Hooven case.  Of the
three different meanings of "United States" which he articulates,
the United  States is  "sovereign" in  only two  of  those  three
meanings.   This is  not a  grammatical oversight  on the part of
Justice Stone.   Sovereignty is not a term to be used lightly, or
without careful consideration.  In fact, it is the foundation for
all governmental  authority in  America,  because  it  is  always
delegated downwards  from the  true source  of  sovereignty,  the
People  themselves.     This   is  the   entire  basis   of   our
Constitutional Republic.   Sovereignty  is so  very important, an
entire chapter  of this  book is  later  dedicated  to  this  one
subject (see Chapter 11 infra).

     The federal  zone over  which the  sovereignty of the United
States** extends is the District of Columbia, the territories and
possessions belonging  to Congress,  and a limited amount of land
within the States of the Union, called federal "enclaves".

     The Secretary  of the  Treasury  can  only  claim  exclusive
jurisdiction over  this federal  zone and  citizens of this zone.
In particular, the federal enclaves within the 50 States can only
come under the exclusive jurisdiction of Congress if they consist
of land which has been properly "ceded" to Congress by the act of
a State  Legislature.   A good  example of a federal enclave is a
"ceded" military  base.   The  authority  to  exercise  exclusive
legislative jurisdiction  over the  District of  Columbia and the
federal enclaves  originates in  Article 1,  Section 8, Clause 17
(1:8:17) of  the U.S.  Constitution.   By virtue of the exclusive
authority that  is vested  in Congress  by this  clause, Congress
shall have the power:


                        Page 4 - 3 of 12

                                                The Federal Zone:


     To exercise  exclusive Legislation  in all Cases whatsoever,
     over such  District (not exceeding ten Miles square) as may,
     by Cession  of particular  States,  and  the  Acceptance  of
     Congress, become  the Seat  of the  Government of the United
     States**, and  to exercise  like Authority  over all  Places
     purchased by  the Consent of the Legislature of the State in
     which  the  Same  shall  be,  for  the  Erection  of  Forts,
     Magazines,   Arsenals,   dock-Yards,   and   other   needful
     Buildings;
                                                                 
                  [Constitution for the United States of America]
                                [Article l, Section 8, Clause 17]
                                                 [emphasis added]
                                                                 
                                                                 
     The power  of Congress  to  exercise  exclusive  legislative
authority over  its territories and possessions, as distinct from
the District  of Columbia and the federal enclaves, is given by a
different authority  in the U.S. Constitution.  This authority is
Article 4, Section 3, Clause 2 (4:3:2), as follows:


     The Congress  shall have  Power to  dispose of  and make all
     needed Rules  and Regulations  respecting the  Territory  or
     other Property belonging to the United States**;

                  [Constitution for the United States of America]
                                 [Article 4, Section 3, Clause 2]
                                                 [emphasis added]


Within these  areas, it  is  essential  to  understand  that  the
Congress is  not subject  to the  same constitutional limitations
which restrict  its power  in the areas of land over which the 50
States exercise their sovereign authority:


     ... [T]he  United States** may acquire territory by conquest
     or by  treaty, and may govern it through the exercise of the
     power of  Congress conferred  by Section  3 of Article IV of
     the Constitution ....

     In exercising  this power,  Congress is  not subject  to the
     same constitutional  limitations, as  when it is legislating
     for the  United States***. ... And in general the guaranties
     [sic] of the Constitution, save as they are limitations upon
     the exercise of executive and legislative power when exerted
     for or  over our insular possessions, extend to them only as
     Congress, in  the exercise  of its  legislative  power  over
     territory belonging  to the  United States**, has made those
     guaranties [sic] applicable.

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


                        Page 4 - 4 of 12

                                          The Three United States


In other  words, the guarantees of the Constitution extend to the
federal zone  only as Congress makes those guarantees applicable,
either to the territory or to the citizens of that zone, or both.
Remember, this  is the  same Hooven case which officially defined
three separate and distinct meanings of the term "United States".
The Supreme  Court ruled that this case would be the last time it
would address  official definitions  of the term "United States".
Therefore, the  Hooven case  must be  judicially noticed  by  the
entire American  legal community.    See  Appendix  W  for  other
rulings and  for citations  to important  essays published in the
Harvard Law  Review on the controversy that surrounds the meaning
of "United  States" even  now.   In particular, author Langdell's
article "The  Status of  Our New Territories" is a key historical
footing for the three Hooven definitions.  To avoid confusion, be
careful to  note that Langdell arranges the three "United States"
in a sequence that is different from that of Hooven:

     Thirdly. --   ...  [T]he term "United States" has often been
     used to  designate all  territory over which the sovereignty
     of the United States** extended.  [a tautology]

     The conclusion,  therefore, is  that, while the term "United
     States" has  three meanings,  only the  first and  second of
     these are known to the Constitution;  and that is equivalent
     to saying  that the  Constitution of the United States*** as
     such does  not extend  beyond the limits of the States which
     are united  by and  under it,  -- a proposition the truth of
     which will,  it is  believed, be  placed beyond  doubt by an
     examination of  the instances  in  which  the  term  "United
     States" is used in the Constitution.

                 [Langdell, "The Status of Our New Territories" ]
                 [12 Harvard Law Review 365, 371, emphasis added]
                                                                 
     Note carefully that Langdell's third definition and Hooven's
second definition  both exhibit subtle tautologies, that is, they
use the  word they  are defining  in the  definitions of the word
defined.     A  careful  reading  of  his  article  reveals  that
Langdell's third  definition of  "United States" actually implies
the whole  American "empire",  namely, the States and the federal
zone  combined,   making  it   identical  to  Justice  Marshall's
definition  (see  above).    Therefore,  because  it  contains  a
provable tautology,  the  second  Hooven  definition  is  clearly
ambiguous too;   it can be interpreted in at least two completely
different ways:   (1) as the federal zone only, or  (2) as the 50
States and the federal zone combined (i.e., the whole "empire").

     So  now,  what  is  "sovereignty"  in  this  context?    The
definitive solution  to this  nagging ambiguity  is found  in the
constitutional  meaning   of  the  word  "exclusive".    Strictly
speaking, the  federal government  is  "sovereign"  over  the  50
States only when it exercises one of a very limited set of powers
enumerated for  it in  Article 1,  Section 8 of the Constitution.
In this sense, the federal government does NOT exercise exclusive


                        Page 4 - 5 of 12

                                                The Federal Zone:


jurisdiction inside  the 50  States  of  the  Union;    it  does,
however, exercise exclusive jurisdiction inside the federal zone.
This exclusive  authority originates from 1:8:17 and 4:3:2 quoted
above.

     Now, apply  1:8:17 and 4:3:2 in the U.S. Constitution to the
jurisdictional claims  of the  Secretary of  the Treasury for the
"internal" revenue laws, as follows:

     The term "United States**" when used in a geographical sense
     includes any  territory under  the sovereignty of the United
     States**.  It includes the states, the District of Columbia,
     the possessions  and territories of the United States**, the
     territorial waters  of the  United States**,  the air  space
     over the  United States**,  and the  seabed and  subsoil  of
     those submarine  areas which are adjacent to the territorial
     waters of  the United  States** and  over which  the  United
     States** has  exclusive rights,  in accordance with interna-
     tional law, with respect to the exploration and exploitation
     of natural resources.
                              [26 CFR 1.911-2(g), emphasis added]
                                       [note the tautology again]

Here's the tautology, in case you missed it:

     "United States" includes any territory under the sovereignty
     of the  United States  and over  which the United States has
     exclusive rights.

This is very much like saying:

     A potato is a plant that grows in a potato field.

                            [Speech of Vice President Dan Quayle]
                                     [1992 Campaign Spelling Bee]

     Notice also  the singular  form of  the phrase  "the  United
States** has  ...";   notice also  the  pivotal  term  "exclusive
rights".    When  this  regulation  says  that  the  jurisdiction
"includes the States", it cannot mean all the land areas enclosed
within the boundaries of the 50 States, because Congress does not
have exclusive  jurisdiction over  the 50  States.  Within the 50
States, Congress only has exclusive jurisdiction over the federal
enclaves inside  the boundaries of the 50 States.  These enclaves
must have  been officially "ceded" to Congress by an explicit act
of the  State Legislatures  involved.   Without a  clear  act  of
"cession" by  one of the State legislatures, the 50 States retain
their  own  sovereign  jurisdiction  inside  their  borders,  and
Congress  cannot   lawfully  take  any  of  their  own  sovereign
jurisdiction away  from the States.  This separation of powers is
one of  the key  reasons why  we have  a "federal  government" as
opposed to  a "national  government";   its powers are limited to
the set specifically enumerated for it by the Constitution.



                        Page 4 - 6 of 12

                                          The Three United States


     Technically speaking,  the 50 States are "foreign countries"
with respect  to each other and with respect to the federal zone.
The key  court authority  on this  question is  the case of In re
Merriam's Estate,  36 NE  505 (1894).   Black's  Law  Dictionary,
Sixth Edition, defines "foreign state" very clearly, as follows:


     The several  United States***  are considered  "foreign"  to
     each other  except as  regards  their  relations  as  common
     members of  the Union.  ... [O]ne  state  of  the  Union  is
     foreign to another.
                                                 [emphasis added]

The foreign  relationship between  the 50  States and the federal
zone is  also recognized in the definition of a "foreign country"
that is  found in  the Instructions  for  Form  2555,    entitled
"Foreign Earned Income", as follows:


     Foreign  Country.    A  foreign  country  is  any  territory
     (including the  air space,  territorial waters,  seabed, and
     subsoil) under  the sovereignty  of a  government other than
     the United States**.  It does not include U.S.** possessions
     or territories.

             [Instructions for Form 2555:  Foreign Earned Income]
           [Department of the Treasury, Internal Revenue Service]
                                                 [emphasis added]

Notice  that   a  "foreign   country"  does  NOT  include  U.S.**
possessions or  territories.   U.S.** possessions and territories
are not  "foreign" with  respect to  the federal  zone;  they are
"domestic" with  respect to  the federal  zone because  they  are
inside the  federal zone.  This relationship is also confirmed by
the  Treasury  Secretary's  official  definition  of  a  "foreign
country" that is published in the Code of Federal Regulations:


     The term "foreign country" when used in a geographical sense
     includes any territory under the sovereignty of a government
     other than  that of  the United  States**.   It includes the
     territorial waters  of the  foreign country  (determined  in
     accordance with  the laws  of the  United States**), the air
     space over  the foreign  country, and the seabed and subsoil
     of  those   submarine  areas   which  are  adjacent  to  the
     territorial waters of the foreign country and over which the
     foreign country  has exclusive  rights, in  accordance  with
     international law,  with  respect  to  the  exploration  and
     exploitation of natural resources.

                              [26 CFR 1.911-2(h), emphasis added]
                                [note the subtle tautology again]




                        Page 4 - 7 of 12

                                                The Federal Zone:


If this  regulation were  to be interpreted any other way, except
that which  is permitted  by  the  U.S.  Constitution,  then  the
sovereign jurisdiction  of the  federal government would stand in
direct opposition  to the sovereign jurisdiction of the 50 States
of the  Union.   In other  words, such an interpretation would be
reduced to  absurd consequences (in Latin, reductio ad absurdum).
Sovereignty is  the key.  It is indivisible.  There cannot be two
sovereign governmental  authorities over  any one  area of  land.
Sovereignty is  the authority  to which  there is  politically no
superior.   Sovereignty is  vested in  one or the other sovereign
entity, such  as a  governmental body  or a  natural born  Person
(like you and me).


     This issue of jurisdiction as it relates to Sovereignty is a
     major  key   to   understanding   our   system   under   our
     Constitution.
                              [The Omnibus, Addendum II, page 11]
                                                                 

     In reviewing  numerous acts  of Congress, author and scholar
Lori Jacques  has come  to the  inescapable conclusion that there
are at  least two  classes of  citizenship in  America:  one  for
persons born  outside the  territorial jurisdiction of the United
States**,  and  one  for  persons  born  inside  the  territorial
jurisdiction  of   the  United   States**.     This   territorial
jurisdiction is  the area  of land over which the United States**
is sovereign  and over  which it  exercises exclusive legislative
jurisdiction, as  stated in  the Hooven  case and the many others
which have preceded it, and followed it:


     When reading the various acts of Congress which had declared
     various people  to be "citizens of the United States", it is
     immediately apparent that many are simply declared "citizens
     of the  United States***"  while others  are declared  to be
     "citizens  of   the  United   States**,   subject   to   the
     jurisdiction of  the United  States**."   The difference  is
     that the  first class  of citizen arises when that person is
     born out  of the  territorial  jurisdiction  of  the  United
     States** Government.   3A  Am Jur 1420, Aliens and Citizens,
     explains:   "A Person is born subject to the jurisdiction of
     the United  States**, for  purposes of acquiring citizenship
     at birth,  if his  birth occurs  in territory over which the
     United States** is sovereign ..."                       [!!]
                                                                 
        [A Ticket to Liberty, Nov. 1990, page 32, emphasis added]


     The above  quotation from  American Jurisprudence  is a  key
that has definitive importance in the context of sovereignty (see
discussion of  "The Key"  in Appendix  P).  Note the pivotal word
"sovereign", which  controls the  entire meaning of this passage.
A person  is born  "subject to  its jurisdiction",  as opposed to


                        Page 4 - 8 of 12

                                          The Three United States


"their jurisdictions",  if his  birth occurs  in  territory  over
which the "United States**" is sovereign.  Therefore, a person is
born subject  to the jurisdiction of the "United States**" if his
birth occurs inside the federal zone.  Conversely, a natural born
person is  born a  Sovereign if  his  birth  occurs  outside  the
federal zone and inside the 50 States.


     Sovereignty  is   a  principle  that  is  so  important  and
fundamental, a  subsequent chapter  of  this  book  is  dedicated
entirely to  discussing its  separate implications  for political
authorities and  for sovereign individuals.  It is also important
to keep  the concept  of sovereignty  uppermost in your thoughts,
where it  belongs, as  we begin our descent into the dense jungle
called statutory  construction.  (This is your Captain speaking.)
So, fasten  your seat  belts.  The Hooven decision sets the stage
for a  critical examination  of key definitions that are found in
the IRC itself.

     One of  the many  statutory definitions  of the term "United
States" is  found in chapter 79 of the IRC, where the definitions
are located:


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

     (9)  United States. -- The term "United States" when used in
          a geographical  sense includes  only the States and the
          District of Columbia.

                                              [26 USC 7701(a)(9)]
                                                 [emphasis added]

     Setting aside  for the  moment the  intended meaning  of the
phrase "in a geographical sense", it is obvious that the District
of Columbia  and the "States" are essential components in the IRC
definition of  the "United States".  There is no debate about the
meaning of "the District of Columbia", but what are "the States"?
The same  question can  be asked  about a different definition of
"United States" that is found in another section of the IRC:


     For purposes of this chapter --

     (2)  United States. -- The term "United States" when used in
          a geographical  sense includes the States, the District
          of Columbia,  the Commonwealth  of Puerto Rico, and the
          Virgin Islands.
                                              [26 USC 3306(j)(2)]
                                                 [emphasis added]




                        Page 4 - 9 of 12

                                                The Federal Zone:


Again, there  is no  apparent debate  about the  meanings of  the
terms "the Commonwealth of Puerto Rico" and "the Virgin Islands".
But what  are "the States"?  Are they the 50 States of the Union?
Are they the federal states which together constitute the federal
zone?   Determining  the  correct  meaning  of  "the  States"  is
therefore pivotal  to understanding  the statutory  definition of
"United States"  in the  Internal Revenue Code.  The next chapter
explores this question in some detail.

     In  addition   to  keeping  sovereignty  uppermost  in  your
thoughts, keep  your eyes fixed on the broad expanse of the dense
jungle you  are about  to enter.   This  jungle was  planted  and
watered by  a political  body with  a dual, or split personality.
On the  one hand,  Congress is empowered to enact public laws for
the 50  States, subject  to certain written restrictions.  On the
other hand,  it is  also empowered  to enact "municipal" statutes
for the federal zone, subject to a different set of restrictions.
Therefore, think of Congress as "City Hall" for the federal zone.
In 1820, Justice Marshall described it this way:


     ...  [Counsel]   has  contended,   that  Congress   must  be
     considered in  two distinct characters.  In one character as
     legislating for  the states;   in  the  other,  as  a  local
     legislature for  the district  [of Columbia].  In the latter
     character, it is admitted, the power of levying direct taxes
     may be  exercised;   but,  it  is  contended,  for  district
     purposes only,  in like manner as the legislature of a state
     may tax  the people  of a state for state purposes.  Without
     inquiring at present into the soundness of this distinction,
     its possible  influence on  the application in this district
     of the  first article of the constitution, and of several of
     the  amendments,   may  not   be  altogether   unworthy   of
     consideration.
                                                                 
                  [Loughborough vs Blake, 15 U.S. (5 Wheat.) 317]
                              [5 L.Ed. 98 (1820), emphasis added]
                                                                 
                                                                 
The problem  thus becomes  one of  deciding which  of these  "two
distinct characters"  is doing the talking.  The language used to
express the  meaning of  "States" in the IRC is arguably the best
place  to  undertake  a  diagnosis  of  this  split  personality.
(Therapy comes later.)
                                                                 
     










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                                          The Three United States


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