Going all the way back to here: "Im familiar with form 2555 foreign income exclusion.  But this taxpayer is a private contractor for the military, working in a combat zone."

It's the "but" that doesn't apply. Yes, that's the form and the exclusion.

You stated this: "Taxpayer received a letter from their employer stating they were in a combat zone and qualify for "combat pay" exclusion."

So, it would already be taken into consideration on the W2, if they are eligible.

But then you stated this, "We file a schedule C for the client" so there is no employer. They are a contractor.

"Form 2555 doesn't apply in this situation due to not meeting time overseas"

Yes, that is a test for your person to meet.

"on how to report combat zone pay exclusion."

Have you seen where your citizen qualifies for this? We haven't.

"Per IRS instructions, civilian contractors in combat zones qualify."

That's not how it reads.

"Civilian taxpayers covered by the relief provisions"

Have you read "the relief provisions?" I did. It means, just because you are not fighting on the front line, a support ship position is still a qualifying position, for example.

I included the spousal link intentionally.

Combat Zone is its own qualification.

Combat Pay is its own qualification.

One does not presume the other.