Foreign Earned Income

[fredazcpa]

does the Foreign Earned Income Exclusion also reduce the income for a person who is providing services in a foreign country being paid by a foreign company?

Cleint tells me nothing has been reported for the two years we are doing 2007 and 2008, but for 2009 they will be getting a 1099 Misc?

Thanks

Fred

[Gail in Virginia]

I am not sure I understand your question. Is you client living in the foreign country as a bona fide resident, or for 330 days a year? Are they working for a foreign employer in a foreign country, or are they living and working here in the US and providing services to a foreign employer? If they are in the US, then no, the foreign earned income exclusion does not apply. And most foreign employers do not report anything to the US, because they are not answerable to the US tax laws but only those of their own country. That does not mean the income is not taxable in the US if the recipient is a US citizen, even living abroad.