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After seeing how his neighbors spent their tax refunds, Peter (voice of Seth MacFarlane) decides to use his to buy a swimming pool. But when the letter comes from the IRS, Peter thinks he's getting a fancy car instead. Turns out, it's an audit. (Peter thought the 't' was silent.) After determining that he won't be getting a refund, Peter decides to dig a pool himself. He accidentally cuts off the neighborhood's power, and learns that zoning laws prohibit him from having a pool. He goes to speak to the mayor, Adam West (voice of Adam West) about the issue. Looking at a town map, the mayor discovers that Peter's property isn't even on it. "You're not even a part of these United States," says West, "which would make you...a communist!" Peter decides that his home is its own country, and he names it "Petoria." Lois (voice of Alex Borstein) tells a news reporter she was skeptical at first, but then thought, "Hey, I could be like Hillary Clinton, only, you know, without the penis." Peter goes on a goodwill mission to America, but he refuses to obey the laws. He does an MC Hammer-like rap number about how he has diplomatic immunity, like the guy in Lethal Weapon 2. Shunned at the UN, Peter gets advice from an Iraqi diplomat who tells him he can get more respect if he goes out and takes what he wants. Peter promptly annexes Joe's (voice of Patrick Warburton) swimming pool. He even invites the leaders of Iraq, Iran, Libya, and Cuba over to a pool party. But President Clinton decides that political sanctions are called for, and soon the army is at Petoria's border, ready to commence "Operation Bomb the Crap Out of Your House."