A simple understanding of globalization is the ever growing integration of trade in the world with the financial markets.
This is due to the liberal policies followed by the countries, which has led to the opening up of world economy.
It is difficult to argue the benefits of liberalization.
As a consequence world is has become a small place.
Professionals from one country are finding it much easier to work elsewhere.
As a citizen of USA you are free to earn your livelihood anywhere in the world.
But the IRS reserves its right to tax you on such income.
It is not necessary that you must be in the employ of a US registered corporation for your earnings to attract income tax.
Even if the payer is a foreign company, you will be liable for payment of tax in USA.
The reason is that the IRS has jurisdiction to tax the income of a US citizen or a resident alien of USA, no matter where the income is earned.
The good news, however, is that there is tax relief for something called foreign earned income.
For an income to qualify as foreign earned income, your tax home has to be in a foreign country.
Normally, this depends on your passing the residence test or alternatively, the physical presence test.
You pass the residence test for your income to qualify as foreign earned income and thus qualify for tax relief if you are resident in the foreign country for one tax year.
To pass the second test, you need to be physically present in the foreign country for at least 330 days out of one year.
Pass one or the other test and qualify for tax relief on your income earned abroad.