There is a feature called the FEIE (Foreign Earned Income Exclusion) which will eventually give this person a discount on his US income tax. If you earn $120K, and it excludes $100K from your taxable income, you end up paying, not the tiny normal income tax on $20K, but what the tax would have been between $100K and $120K (around $5000 to $5600, with little other income.) To qualify for the FEIE, you have to be a bona fide foreign resident. The rules on that are complicated enough that I'll just say there is a pretty clear basic explanation on the IRS website. The executive summary is that you won't qualify in your first year of working abroad, but after that, you probably will unless you make a long visit to the US.
If you work for a US company, you are likely to be required to pay Social Security and Medicare tax as well. Foreign employer? Payment is optional.
Imposing a worldwide income tax obligation on citizens living abroad (and, in the US, permanent residents who want to keep their green cards!) is trendy lighthearted fashion fun for the fiscal authorities of OECD countries. Canada has already announced that they will start doing this, and several EU countries are at least thinking about it. It doesn't bring in much revenue, but they get to make their citizens living abroad fill out two or more tax returns every year, and show us our place by treating us as suspected criminals.
Speaking of that, if you live, work, or invest abroad, the US also has a new regime for reporting foreign financial assets. Two completely separate reports are required for the same information, and one of them kicks in at a very low asset level. One is part of the regular Form 1040, and Tax Prep software like TurboTax can pretty much cope with it, while the other report is made (online only now!) to the Treasury agency charged with investigating financial crimes. That makes me feel all warm and fuzzy, especially when I found out that my 2012 report had not been received because their website did not get along with my browser.
