US citizens and residents are subject to tax on worldwide income regardless of the location of their permanent home. Expatriates and Americans who are continuously living overseas are still required to file US income tax return and pay any taxes due. Because of the immense burden on taxpayers, Section 911 of the Tax Code was enacted to heave a sigh of relief. The current language of the statute has its roots back to 1942 when Congress considered it necessary to encourage, promote and stimulate international trade, by providing foreign earned income exclusion. The exclusion is capped at $100,800 for 2015 and $101,300 for 2016 tax year. Foreign earned income is defined as income derived from or attributable to services performed in a foreign country. But what is the definition of a foreign country?