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The US tax law requires US citizens - regardless where they live - to file the tax return and report all worldwide income. As an US citizen you have certain tax responsibilities with US taxing authorities. These responsibilities are separate from your responsibilities in a foreign country.
To to claim foreign earned income exclusion - the taxpayer should file either form 2555 or 2555EZ. Here are forms: Form 2555 Instruction 2555
Please be aware that - the exclusion above will not affect self-employment taxes - only income taxes. Only earned income is excludable - income from wages and self-employment. For instance - dividends, investment income, rental income, pensions, etc - are not excludable. Please also be aware that this credit is not granted automatically - you need to file a tax return and claim the credit. If the person bona fide resident of a foreign country - he/she may qualify for the foreign earned income and foreign housing exclusions and the foreign housing deduction. ($92,900 for 2011). To qualify for the foreign earned income exclusion - that should be a compensation for work done in a foreign country. If your workplace was in the US - the compensation doesn't qualify for the foreign earned income exclusion.
If the same income is taxable abroad and in the US - you may claim a credit for taxes paid abroad - so the same income would not be taxed twice. Use the form 1116 - http://www.irs.gov/pub/irs-pdf/f1116.pdf
please find instructions here - http://www.irs.gov/pub/irs-pdf/f1116.pdf
The credit is limited by the US tax liability on the same income - the form 1116 is used to calculate the amount of credit. Means - if tax liability abroad is higher - there will not be US taxes on that income, but if tax liability abroad is lower - in the US you will pay the difference after the credit will be applied.
You may amend your past tax returns
if you did not claim these benefits and request a refund for overpaid taxes.
Let me know if you need any help.
Be sure to ask if any clarification needed.