You set up a one-person company in Hong Kong, the U.K., or Taiwan to run your consulting work or hold a property. Someone told you it is "disregarded" for U.S. tax purposes, so the income just flows onto your return. That part may be true. What is often missed is that a disregarded foreign entity comes with its own information return, Form 8858, and a $10,000 penalty for each year it is not filed.