The Federal Zone Thesis at Its Foundation

The thesis

The Federal Zone — Paul Andrew Mitchell’s 1992 work, in its eleventh edition by 2001 — is the most intellectually serious text the alternate-tax movement has produced. It runs 212 pages, cites real cases, quotes real statutes, and builds a sustained analytical argument across fourteen chapters and extensive appendices. It is the source from which dozens of downstream retail operations — Weiss+Paris, the Revocation-of-Election theory, various “redemption” packages — draw their claim structure.

The book’s central thesis is structural: the federal income tax, as enacted in the Internal Revenue Code, applies only to the “federal zone” — the District of Columbia, U.S. territories, and federal enclaves. Americans living and working in the fifty states are, on Mitchell’s reading, “nonresident aliens” with respect to the federal zone, owing no income tax unless they have volunteered into federal jurisdiction by filing a Form 1040.

The thesis does substantial conceptual work. It re-reads Brushaber v. Union Pacific, the foundational 1916 Supreme Court case on the income tax. It reframes the IRC’s structure of “resident citizen / nonresident citizen / resident alien / nonresident alien.” It deploys textual close-reading on the IRC’s definitions of “State” and “United States.” It marshals popular- sovereignty doctrine to argue that federal taxing authority is territorially bounded.

The whole structure rests on a foundation. The foundation is in three pieces:

1. The Supreme Court’s recognition in Hooven & Allison Co. v. Evatt, 324 U.S. 652 (1945), that “United States” has three distinct legal meanings — and that the IRC uses the term in the second meaning (federal territory only), not the third (the collective fifty states).
2. The IRC’s definition of “State” at 26 U.S.C. § 7741(a)(10), which uses the word “include” rather than “mean” — and which, on Mitchell’s reading, restricts “State” to the District of Columbia and federal possessions, excluding the fifty states.
3. The general construction rule that the word “includes” in tax statutes is restrictive — limiting the defined term to the items enumerated, rather than non-exclusively adding to whatever the term ordinarily means.

Each of those foundations is doing real argumentative work for Mitchell. Each of them is testable against primary sources. This essay tests all three.

The result is straightforward enough to state up front: none of the three foundations holds against the actual texts. The IRC itself supplies a construction rule — § 7701(c) — that directly forecloses the central move. The IRC’s own geographic definition of “United States” — § 7701(a)(9) — says the opposite of what Mitchell claims. And the Hooven case, while it does identify three senses of “United States,” does not identify the three senses Mitchell attributes to it.

The structure built on these foundations is elaborate. The foundations don’t carry it.

What Hooven & Allison actually says

Hooven & Allison Co. v. Evatt, 324 U.S. 652 (1945), was a tariff case. The question was whether goods imported from the Philippines into Ohio were “imports” within the meaning of the federal Constitution’s Import-Export Clause — and therefore exempt from state taxation. To answer that, the Court had to address what “United States” meant in that constitutional context. The relevant passage, in its entirety:

“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.”

Three senses. Compare with the three senses Mitchell attributes to the case:

The substitution at sense #2 is not faithful to the Court’s language. Hooven’s sense #2 — “the territory over which the sovereignty of the United States extends” — is the broader concept, not the narrower one. The Court used it to capture the Philippines specifically: the Philippines was U.S. territory in the sense that U.S. sovereignty extended over it, but it was not part of “the states united under the Constitution.” That distinction was dispositive on the import-or-not question — goods from the Philippines were imports for Import-Export Clause purposes because the Philippines was outside the constitutional union, even though it was U.S. territory.

Mitchell collapses Hooven’s sense #2 into “federal territory / D.C.” in a way that inverts what the Court was doing. The Court was distinguishing the federal sovereign generally — including the Philippines — from the constitutional union of states specifically. Mitchell reads sense #2 as “the federal zone” and sense #3 as “the fifty states,” and then claims the IRC uses sense #2.

Beyond the misreading of Hooven’s own language, there’s a more basic problem: Hooven is a 1940s tariff case. It does not address the IRC’s geographic scope. The Supreme Court was not, in Hooven, construing the Internal Revenue Code’s use of the term “United States.” It was construing the Constitution’s Import-Export Clause to determine whether a state tax on Philippine goods was barred. The case’s three-senses observation is genuine, but it does not reach the IRC, and the IRC has its own answer to the IRC-scope question.

That answer is in 26 U.S.C. § 7701(a)(9).

What the IRC says about “United States”

The IRC’s own definition of “United States” — for purposes of the entire Title 26 — is at 26 U.S.C. § 7701(a)(9). The verbatim text:

“The term ‘United States’ when used in a geographical sense includes only the States and the District of Columbia.”

The word “only” matters here, but not in the direction Mitchell’s thesis needs. “Only” restricts the term from extending to foreign nations or to unincorporated possessions. It does not exclude the fifty states; the fifty states are explicitly the first thing the geographic definition includes. The IRC’s “United States” is “the States and D.C.” — period.

This single statutory provision is sufficient to refute the central move of the Federal Zone thesis on a textual basis. Mitchell argues that “United States” in the IRC means the federal territory only. The IRC, in its own words, says it means the fifty states + D.C. The two statements are direct contradictions. The thesis depends on Hooven’s sense #2 governing IRC interpretation; the IRC supplies its own definition and that definition is the opposite.

What the IRC says about “State”

The IRC’s definition of “State” is at 26 U.S.C. § 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.”

Mitchell is correct on one point: the statute uses “include,” not “mean.” The fifty states are not enumerated in the definition. He draws an inference from this textual feature: that “State” is limited to D.C. and federal possessions, with the fifty states excluded.

The inference is the problem, not the textual observation. The word “State” in everyday legal English means a member of the constitutional Union — one of the fifty. That is the ordinary meaning. The IRC’s definition says: in addition to that ordinary meaning, treat “State” as including D.C. for purposes of carrying out the title. The provision is expansive, not restrictive. It covers the fifty states (by ordinary meaning) AND D.C. (by the statutory addition).

The construction rule that compels this reading is in the next relevant subsection of the same section: § 7701(c).

What “includes” means in the IRC

26 U.S.C. § 7701(c) — “Includes and including” — is the construction rule that governs “includes” wherever it appears in the IRC. Verbatim:

“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.”

This is dispositive on Mitchell’s central argumentative move. The thesis claims that “includes” in IRC definitions is restrictive — that “State includes D.C.” means “State is limited to D.C.” The IRC’s own text says the opposite: “includes” shall not be deemed to exclude other things within the term’s ordinary meaning. The fifty states are within the ordinary meaning of “State.” The IRC says they are not excluded.

Mitchell’s authority for the restrictive reading is Treasury Decision 3980, an administrative pronouncement from the early 1930s. Whatever TD 3980 said about “includes” is not load-bearing for IRC interpretation. The IRC is an enacted statute (or set of enacted statutes — the Internal Revenue Code of 1939, 1954, and 1986 as amended). § 7701(c) is part of those enacted statutes. A Treasury Decision is an administrative interpretation, hierarchically subordinate to a Code provision. When the two conflict, the Code provision controls.

Adverse Review’s prior finding on Title 26’s positive-law status is relevant here. Title 26 itself is prima facie evidence of the law, but the underlying IRC enactments are statute. § 7701(c) traces to those enactments. It is statutory, and it controls.

The expressio unius canon — and why § 7701(c) is its express override

What gives Mitchell’s argument its rhetorical force is not § 7701(c) — which contradicts him — but a real and ancient canon of statutory construction: expressio unius est exclusio alterius. “The express mention of one thing excludes others.” (The variant inclusio unius est exclusio alterius — “the inclusion of one is the exclusion of another” — is the same idea applied directly to “includes” formulations.)

The canon is real. It is centuries old. Federal courts apply it routinely across U.S. statutory interpretation. When a statute lists certain items, items not listed are presumed excluded. So: when the IRC says “State shall be construed to include the District of Columbia,” the canon supplies a presumption that the fifty states (not listed) are not within the term.

Mitchell does not invoke the canon by name in The Federal Zone — or invokes it sparingly — but the canon is the doctrinal backbone of his entire close-reading approach. Honest analysis has to engage it directly, because the rhetorical force of the thesis depends on a reader silently accepting the canon’s presumption and not noticing that the IRC has explicitly overridden it.

What the canon actually says

Expressio unius is not an absolute rule. It is a presumption — an interpretive default that operates when the statute’s language is otherwise ambiguous. Like every statutory-construction canon, it yields to:

1. Express statutory language to the contrary. When the legislature speaks directly to whether a list is exhaustive or illustrative, the legislature’s express choice controls. The canon’s presumption only operates in the silence.
2. Other canonical guidance. Other canons — ejusdem generis, the rule against surplusage, the whole-act rule — frequently point in the opposite direction. Courts weigh them.
3. Context that signals non-exhaustive intent. Words like “include,” “such as,” or “including but not limited to” are conventional drafter signals that the list is illustrative, not exhaustive. Across federal statutory drafting, “include” is more often used as expansive than as restrictive.
4. Absurd results. When the canon’s application would produce nonsensical or self-contradictory readings of the statute, courts decline to apply it.

These limits on the canon are not invented for this analysis. Every leading statutory-interpretation treatise — Sutherland Statutory Construction, Scalia & Garner: Reading Law — describes the canon’s operation in essentially these terms. The canon raises a presumption; the presumption can be rebutted; the rebuttals are well-mapped.

What § 7701(c) does to the canon

26 U.S.C. § 7701(c) is the IRC’s response to exactly this question. It is Congress’s express override of expressio unius for the IRC. The legislature has spoken directly to the question the canon raises a presumption about — “when this title says ‘includes,’ is the listing exhaustive?” — and answered it: no.

Once Congress has expressly addressed the question, the canon’s presumption no longer operates. The canon is not a rule Congress cannot override; it is exactly the kind of default Congress overrides every time it adopts a “rule of construction” provision. § 7701(c) is such a provision, plainly drafted, located in the IRC’s general definitions section, applicable to the entire title.

To the extent Mitchell’s argument depends on the canon’s presumption holding for IRC definitions, the argument depends on Congress not having overridden the canon. But Congress has — clearly, explicitly, and in unmistakable terms. § 7701(c) is the override.

Even without § 7701(c), the canon does not produce Mitchell’s conclusion

The deeper problem with Mitchell’s invocation of the canon is that it does not produce his result even on the canon’s own terms. Expressio unius presumes that items not enumerated are excluded. The fifty states are not “items not enumerated” in any analytically useful sense — they are within the ordinary meaning of the word “State.” The canon does not operate to exclude things within a term’s plain meaning; it operates to limit a statute’s reach to things either listed or within the term’s natural scope, foreclosing additional categories that an advocate might want to read in.

A non-tax illustration: if a statute provides “vehicles include automobiles, trucks, and motorcycles,” the canon would not exclude “cars” — cars are within the plain meaning of “vehicles.” The canon might exclude “horses” or “boats” — things outside the ordinary meaning. The listed items add specificity to the plain meaning, not subtraction from it.

Applied to § 7701(a)(10) (“State shall be construed to include the District of Columbia”): the fifty states are within the plain meaning of “State.” D.C. is the listed addition. Read straight, the canon adds D.C. to the ordinary meaning rather than restricting “State” to D.C. For Mitchell’s reading to work, the canon would have to operate against the term’s plain meaning — flipping it rather than refining it. That is not how the canon operates.

Why the move is rhetorically powerful anyway

If the canon does not actually support Mitchell’s conclusion, why does the argument seem persuasive on first encounter? The rhetorical power comes from three sources:

• The canon is real and prestigious. Citing a Latin maxim that the Supreme Court has applied in dozens of cases gives the argument an aura of doctrinal seriousness. Readers without statutory-construction training assume the canon does what Mitchell says it does.
• The “include” formulation is conventionally non-exhaustive in legal English, but readers do not always know this. A reader encountering “State shall be construed to include the District of Columbia” without statutory-construction training may genuinely read it as restrictive. The IRC’s drafters knew this risk and supplied § 7701(c) precisely to foreclose the misreading.
• The argument does not foreground § 7701(c). The Federal Zone and its derivatives engage with § 7701(a)(10) and the substantive definitions; the construction rule is mentioned briefly or not at all. The rhetorical sleight is not in the canon itself but in not surfacing the override.

Honest engagement with the canon, then, restores the override. Expressio unius is a real canon that produces real interpretive presumptions. § 7701(c) is Congress’s clear and direct override of that canon for the IRC. The two operate together exactly as statutory-construction practice anticipates: a canon raises a presumption; an express statutory rule resolves the question. That is the system working as designed — not the system being subverted by Congress, and not the canon being ignored by interpreters.

The Supreme Court reached the same conclusion in 1934

The construction-rule question was raised at the apex tribunal in substantively the same form, and answered on the merits, in 1934. Helvering v. Morgan’s, Inc., 293 U.S. 121 (1934), construed “includes” in a Revenue Act of 1928 definition. The Court’s treatment:

“‘includes’ imports a general class, some of whose particular instances are those specified in the definition.”

The Court relied on Section 2(b) of the Revenue Act — the precursor to § 7701(c) — which already provided that “‘includes’ and ‘including’ … shall not be deemed to exclude other things otherwise within the meaning of the term defined.” That same construction rule has been continuously preserved through the IRC of 1939, the IRC of 1954, and the IRC of 1986, now appearing as § 7701(c).

The implication closes the analytical loop. The Federal Zone thesis depends on the restrictive reading of “includes” being correct on the canon. The Supreme Court, in 1934, on substantively the same statutory question, said it is not. The answer to the construction-rule question was given at the highest tribunal, during a period when apex receptivity for substantive statutory- construction arguments was open, and the answer has been binding precedent for over ninety years. The full treatment is in this finding.

The impedance reading: the question was raised at the appropriate level, engaged on the merits, and resolved. Subsequent post-1980s tax-protester re-raisings of the same construction question get routed to circuit courts that apply the binding 1934 precedent — sometimes substantively, often through the Crain doctrine of non-engagement. That disposition pattern is what apex precedent produces, not what suppression looks like.

The structural error: tradition mismatch

What kind of mistake is Mitchell making? It is, in [Lens IV] terms, a tradition-mismatch — taking observations from one doctrinal context (the Hooven tariff/import line) and projecting them into another (federal income-tax jurisdiction) without the institutional support that would make the projection work.

This is a recurring pattern in the alternate-tax movement. A genuine observation in one area of law is identified — Hooven’s three-senses observation is real, and worth surfacing in tariff analysis where it does work. The observation is then re-deployed in a context where it lacks institutional purchase. The re-deployment looks rigorous because it cites a real Supreme Court case. The re-deployment is non-rigorous because the case did not address the question to which the observation is being applied, and the relevant context (the IRC) has its own answer to that question.

The IRC has the apparatus to answer the question on its own terms. § 7701 is that apparatus. § 7701(a)(9) defines “United States” for geographic purposes. § 7701(a)(10) defines “State.” § 7701(c) tells us how to read “includes.” The apparatus is internally consistent: “United States” = 50 states + D.C.; “State” = the ordinary meaning plus D.C. by statutory addition; “includes” is non-exclusive. Read straight, the IRC reaches the fifty states without ambiguity.

To produce the Federal Zone thesis, three moves have to happen:

1. Hooven’s sense #2 must be re-narrated as “federal territory / D.C.” rather than “territory over which U.S. sovereignty extends.”
2. The IRC’s “United States” must be read as Mitchell’s reframed Hooven sense #2 rather than as § 7701(a)(9) defines it.
3. The IRC’s “includes” must be read as restrictive — overriding § 7701(c)’s explicit non-exclusive rule.

Each move is a separate departure from the texts. None of the three is supported by the actual primary sources. The cumulative effect is the elaborate territorial-limits structure that The Federal Zone develops over its 212 pages.

What survives, what doesn’t

This essay covers Phase 1 of the Federal Zone evaluation — the foundational structural-interpretation claims (Clusters C, D, E in the project’s evaluation plan). Other parts of the book will be addressed in subsequent installments:

• Mitchell’s reading of Brushaber — the centerpiece of the book, addressed in Phase 2.
• The “voluntary compliance” framework — Phase 3.
• The 16th Amendment ratification question — Phase 4.
• The sovereignty / fundamental-law grand theory — Phase 5.
• Impedance analysis — Phase 6.

The Phase 1 finding is that the foundation does not hold. The construction-rule reading on which the entire thesis depends is foreclosed by the IRC’s own construction rule. The “Three Meanings” reading on which the territorial-limits move depends mischaracterizes Hooven and projects it onto a context the case does not address. The “State means D.C. only” reading is contradicted by the statute’s own definitional structure read with its own construction rule.

Subsequent phases may surface points where Mitchell’s analysis is more durable — places where genuine textual tensions or doctrinal ambiguities exist that the courts have harmonized rather than resolved. Some of his claims about “voluntary” tax administration have a real basis (the IRS does describe the system as voluntary; what that means is a separate question). The 16th Amendment ratification record does have historical irregularities, even if courts have foreclosed the legal challenge.

But the foundation — the territorial-limits structure that gives the rest of the book its argumentative force — does not stand on the texts the book cites. It stands only if those texts say what Mitchell says they say. They don’t.

Verdict

Unsupported. The foundational claims of the Federal Zone thesis fail at primary-source verification:

• Hooven’s “Three Meanings” do not match Mitchell’s three senses, and Hooven does not address IRC scope at all.
• 26 U.S.C. § 7701(a)(9) explicitly defines “United States” to include the fifty states.
• 26 U.S.C. § 7701(c) explicitly defines “includes” as non-exclusive — directly forecloses the restrictive reading the thesis depends on.

The intellectual seriousness of The Federal Zone makes it worthwhile to engage with carefully. But seriousness in construction is not seriousness in conclusion. A 212-page argument built on three departures from the texts it cites is a 212-page argument that gives way once the texts are checked. § 7701(c) is the single sentence that does most of the work.

Subsequent phases of this analysis will examine what’s left when the foundation is removed. The construction-rule problem is not the end of the conversation — it’s where the conversation has to start honestly.

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