H1B holder working in US for Canadian Client

[vpawate]

if anyone has come across this situation pls feel free to provide inputs :

I am currently on H1B with my visa (6th year) ending in May 2012.

The client I am working with is based out of Toronto, Canada.

I need to file for my H1B extension .. but my immigration folks are saying this may not go well with USCIS as this is not a US based client and my H1B extension may run a high chance of rejection.

What are my options ?

[JoeF]

Need more info:

Is your employer US-based? Are you working remotely from the US?