Thank you for giving me the opportunity to assist you. I will give the best answer that I can with the information provided.
As a US Citizen/resident, you must declare your worldwide income on an income tax return, even if it is not earned in the US. Just because there are persons who live/work out of the US and don't report their income, it is not necessarily the correct or legal thing to do.
There are several different concerns for you. One, is whether or not you are entitled to the foreign income exclusion. This is a tax provision for individuals who live and work abroad, and if you meet certain requirements, you are able to exclude up to $91,500 of income from tax in 2010, and up to $92,900 in 2011. However, to use this exclusion, you must still file a tax return: http://www.irs.gov/businesses/small/international/article/0,,id=97130,00.html
If your income exceeds this amount, or if you are not eligible for this provision, there are other possibilities of paying less US tax on your income if you pay income tax to the foreign country, through the foreign income tax credit or deduction, or US-foreign country tax treaties.
Please let me know if you need additional information.