Federal means League. Does the league control the constituents? No.

Everyone just assumes federal means superior to state and local. This is false.

The definition is:

having or relating to a system of government in which several states form a unity but remain independent in internal affairs (source)

Each state remains independent in internal affairs.

Looking at the word origin, we find:

mid 17th century: from Latin foedus, foeder- ‘league, covenant’ + -al. (source)
So federal means a league. Federal government means the government for the league, which is the representative body for when the member states interact with other leagues or states.
The league may be superior to the member states in external affairs for the league, but is not involved with the internal affairs of the member states.
Now if the states agree to let the league/federal government into their affairs, well then that is the state’s decision.
The classic scene of a federal agency showing up in a movie scene and the state or local actors step aside is absolutely not based on reality.
The dictionary definition also states:
relating to or denoting the central government of the US.
Note, the word central is used deceptively here. A government is of course central to the state it governs. This extra definition is trying to imply the federal/league government is central to the 50 states, which is not the case. The US central government is central to the United States, which is DC and the territories.
It’s off they couldn’t spell out US.

Tax Implications

If the states are independent in internal affairs versus the federal/league government, then the Internal Revenue Service would mean it’s servicing the internal events and transactions of the one-square mile area of District of Columbia and the territories, such as Puerto Rico. It does not touch the internal affair of the 50 states.

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