Yes, that's true. Americans can be taxed for income earned outside the country. I'm not an expert on this subject, but I don't think that income earned by an i

Yes, that's true. Americans can be taxed for income earned outside the country. I'm not an expert on this subject, but I don't think that income earned by an incorporation would be taxed if it's incorporated outside the United States. However, the incorporation would have to pay its employee, and that employee's income would be subject to taxation if the employee is a US citizen. It's not quite as bad as it sounds though. The first $93000 of income earned abroad is not subject to taxation. Many countries (such as Canada and Germany) have reciprocal income tax treaties with the United States that keep citizens from being double-taxed. A US citizen in Germany, for example, wouldn't have to pay any US income tax on income earned in Germany as long as that income was subjected to German income taxes. Other income such as stock dividends and capital gains is another matter. I'm not entirely certain if that is double taxed or not. The IRS has a web page listing income tax treaties with various countries: http://www.irs.gov/Businesses/International-Businesses/United-States-Income-Tax-Treaties---A-to-Z http://www.irs.gov/Businesses/International-Businesses/Unite...