I have a J1 visa and am covered now under the Italy/US Tax Treaty, meaning I pay no income tax. My employer is converting me to an H1B visa. I understand that I will pay the taxes while I am on H1B, but someone told me I will also have to pay back taxes on the money I earned while on a J1. Is this true?

Negative; I just revewed the technical explanation for the U.S.-Italy Tax Treaty and I see no provision for paying the taxes retroactively under ANY circumstances.