@Pongko , @Chris12122 , having read through all of the above interaction(s) and generally agreeing with @DaveF1006 and partially with @Vanessa A , let me cover some general points:
(a) US tax position as enunciated by the IRS, any and all work done in the US is US work i.e. the earnings is generally US sourced, (no matter where the "employer/payor" is ) and therefore taxable by the US.
(b) Most tax treaties do recognize this position but some still retain the right to tax this outflow -- especially if the entity gets to exclude this from local taxation as wages AND the "recipient " is a citizen of that country.
(c) tax treaties are generally to ameliorate the effects of the possible double taxation by allowing the income to be resourced to the foreign country and avail the taxpayer of foreign tax credit ( form 1116 ).
(d) Totalization agreement is applicable ONLY for US persons ( Citizen/Greencard ) if they performed work in a foreign country , paid by a local entity, and "FICA" local equivalent was collected by the local govt. This is because irrespective of where the wages/self-employment is earned, a US person must still pay FICA/SECA. Generally tax and totalization treaties cover this area , including what happens when the US person is repatriated and/or retired
(e) Generally , if a US person ( Citizen/Green Card/Resident for tax purposes ) has earnings from a foreign source ( including working for foreign govt. such as embassies and sometimes for international organization ) and performed the work in the US, he/she is treated as self-employed and therefore SECA ( the full employer & employee's portion of FICA ) is applicable --- Schedule -C , except there may not be any "expenses" deduction available .
(f) It is generally advisable that one has something from the foreign entity to show the actual amounts earned -- an annual statement of payments should be sufficient. Foreign entities are not under US laws and therefore cannot be required to provide 1099s etc.
Does this clarify the situation or can I provide more info ?
pk
