Nearly all other countries tax based on location. If you earn money in the country, they tax it. If you earn money outside the country, it's not their concern. Even if this is a tax cheat, it really has nothing to do with the IRS, other than being a money grab simply because nonsensical U.S. law allows them to do it. The profit in Luxembourg came from Amazon's European operations. If Luxembourg or the EU wants to sue Amazon over this, then that's their legitimate right. But it has nothing to do with the U.S. nor the IRS.