Taxes on offshore company net income ( US citizen owner )?

[wal49]

let's think about this scenario :
Joe is as US citizen ,he registered his online (e.g consulting) business offshore in a 0% tax haven jurisdiction (British Virgin Islands,Seychelles &Co),the company's cash is held in a bank account (offshore) under the name 'XYZ consulting' (corporate bank account), the company net income for the year is $120k and Joe pays himself a $40k/year salary.which he transfers to his personal bank account ,he concludes his business exclusively offshore (but lives in the US )
the US taxes worldwide income ,but what is considered in this case income , the 120k(company's net income) ? or the 40k(his salary) ? and if it's the $40k ,that money left under the company 's name ($80k) ,is it taxable under US law or not ?
clarification or further information on this issue would be appreciated
thank you in advance

[emek]

S-Corp? C-Corp?

Your assertion that all work is conducted offshore is bogus. The business is online consulting. There's absolutely no way the IRS would believe Joe flys to BVI everytime he does any work.

Thus all income is effectively connected income and taxable by the IRS. A C Corp would pay 35% on the income and then Joe would pay further income tax when he received the remaining $50K as dividends.

[freedom97]

world wide income is world wide income to US Citizens
the corporation may be exempt from taxes since it is not a US entity but his income paid by the corp is definitely world wide income