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Basically, the irs recognizes that income earned abroad is taxed together with resident country, and might be excluded from taxable income by the IRS generally if the proper forms are lodged. The source of the income salary paid for earned income has no bearing on whether is U.S. or foreign earned income, instead where process or services are performed (as on the inside example of an employee employed by the Ough.S. subsidiary abroad, and receiving his salary from parents U.S. company out with the U.S.).

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