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I then asked her to bring all the documents, past and present, regarding her finances sent by banks, and and much more. After another check which lasted for almost half an hour I reported that she was currently receiving a pension from her late husband's employer which the taxman already knew about but she had failed to report that income in their tax develop. She agreed.
Basically, the government recognizes that income earned abroad is taxed along with resident country, and might be excluded from taxable income the particular IRS if for example the proper forms are filled out. The source of the income salary paid for earned income has no bearing on whether ought to U.S. or foreign earned income, but alternatively where in order to or services are performed (as on the inside example associated with the employee employed by the Ough.S. subsidiary abroad, and receiving his pay check from parents U.S. company out from the U.S.).
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