How has this glaring hole in the law escaped detection for so long?
When the income tax started out it was considered voluntary. During WWII it was called the "victory tax" and was purely voluntary, but after WWII the IRS, capitalizing on the consensus that to refuse to file was unpatriotic, started demanding the tax from everyone. In 1954 the code was rewritten to edit out all references to constitutional exemptions and to the limited Constitutional definition of "income" (profits, gains).
But the hole in the law has not escaped detection, although that discovery has been suppressed by the government and the media. For many years, now, thousands have asked the IRS to show them the law that made them liable for the tax, but the IRS cannot produce one statute to that effect. That is because there is no such law they can produce.