I'm a Spanish J1 scholar in the USA. I entered the country in March 2011, and have been working for a university as a researcher since. Up until October 31st, I was paid by my USA university, and had taxes withheld, and received a W2 for it. From November onwards, I have been paid in the UK by an institution that due to its status as an international organisation is not subject to taxation there.

I also am paid a nominal fee (~$100/month) by my American employer, for reasons that are long and complicated.

What portion of this income is subject to taxation by the IRS? I have no domicile in Spain, and as far as I understand it, I'm exempt from federal taxation the first two years I'm here, regardless of where the income came from? Additionally, I believe my income falls under the UK-USA tax treaty?

On a J1 visa you are a non-resident alien for 2 years (students for 5 years). That means you only have to report US source income. So you would only report the income reported on the W2.
Unless you established tax residency in the UK before coming to the US, you would only be able to claim the treaty with Spain (assuming you lived in Spain before coming to the US).

Thank you so much for that - to clarify some points:

I am not a resident of Spain. I lived in the UK from 2006 to 2011, and paid taxes and National Insurance there when appropriate, so I am guessing I established tax residency there - I have certainly never paid Spanish taxes.

My current employer in the UK is a very peculiar institution - all earnings for all employees are tax exempt and we make no contribution to either UK taxes or National Insurance, due to our particular nature. Is there any means by which to explain that to IRS, or any way of marking my earnings as tax exempt?