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U.S. citizens are expected to shell out taxes on all incomes made in foreign areas. The proceeds are to be included inside their income taxation statements and the required taxes need to be paid. However, for incomes that are taxed within the foreign countries, taxpayers should include a tax credit equivalent towards taxes paid but into the limit for this taxes that would have been paid when the taxable income appeared domestically. For citizens that reside abroad, the IRS provides a tax free waiver for the first $92,900 earned this season.

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Defenders of this IRS position would say it comes home to Section 61. The waitress provided a service for me, and I paid as it. Compensation for services is taxable. End of post.

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