I am a sole proprietor. I meet the test for tax home and physical presence test for foreign earned income. I am a sole proprietor operating outside the US in a South American city. My situation isn’t easily defined because I am not paid by a company in South America for my work. I maintain a home office and a full time paid assistant in South America. The work done is operating a retail internet business which targets the US market and other countries. The work is done in South America by phone, fax and e-mail where I arrange to buy merchandise and services and pay other businesses in the US to do fulfillment work in the US. I have no employees in the US. Mailbox only in the US and credit card sales paying into business checking accounts are in the US. I also manage from my South American office the importing of goods buying from a South American business for import and sale in the US. I need to be in South America to oversee the South American manufacturer. My income results from mainly US and some foreign buyers of the work I do in South America. Is it foreign earned income? Do I qualify for the tax exemption.