Tax optimization : US/PA/PY

Is ok.

You could consider less complicated.

What's the purpose of Panama?

Shielding LLC pass-through from PY?

CEO said:

I don't know much details, I share it to know the pros and cons.

It depends on the use case. How did you come up with this setup?

CEO said:

A piece of information shared by a business owner I knew based in the US.

If he is a U.S. person (resident or citizen), which appears to be the case if you say “based in the U.S.”, then this business owner will soon have to deal with the IRS.

It's a trend among clownsultants on X. PY Residency + Panama Foundation/Company. A Panamanian law firm gives them an affiliate, so now they sell it.

If your US guy is sourcing his knowledge there. Take him with a grain of salt.

Let’s put it clear: that U.S. guy is an idiot and he is risking serious consequences for just a few hundred $ rebates.

If a U.S. person helps structure transactions, moves funds, or provides advice that results in transferring proceeds of foreign tax evasion through the U.S., he is inside the money laundering statute even if the actual taxes are owed abroad. This can simply mean using USD currency.

18 U.S.C. § 1956 criminalizes financial transactions designed to conceal proceeds of specified unlawful activity. Specified unlawful activity includes foreign tax crimes when the foreign country criminalizes them. This was defined by the PATRIOT Act (2001) expansion of the definition.
See for example United States v. Kazzaz, 592 F. App’x 608 (9th Cir. 2014), which upheld money laundering charges based on foreign tax evasion as the predicate.

But there’s more.

18 U.S.C. § 1343: Wire Fraud
If the U.S. person communicates electronically with clients abroad while knowing the plan involves illegal evasion of a foreign tax regime, DOJ can stretch wire fraud theories. They usually combine it with money laundering for extra slaughtering.

18 U.S.C. § 371 + §1956: “Conspiracy to commit money laundering”
This is your one way ticket to jail. If he merely gives advice but knows clients will funnel funds into or through the U.S., risk becomes extreme. DOJ does not care that the tax loss is suffered by a foreign state.

In short: the U.S. does not prosecute foreign tax evasion itself, but it prosecutes conduct inside U.S. jurisdiction that facilitates foreign tax evasion, usually via money laundering or wire fraud.

Advising to use a U.S. LLC to commit tax fraud automatically qualifies him for - at least - a free vacation in Club Fed.

Marty McFly said:

Advising to use a U.S. LLC to commit tax fraud automatically qualifies him for - at least - a free vacation in Club Fed.

Hell yes! A vicious DOJ agent can use this simple fact to roast him for good (and take a large cut of his assets).

CEO said:

What's the purpose of the thread? Share thoughts not prejudices.

How can you trust a consultant who doesn’t even know his own country’s laws?
The advice by itself is meaningless. It might or might not make sense depending on your situation and objectives.

CEO said:

I don't trust, I shared it to discuss it that's the main reason.

No good or bad structures exist. It is impossible to determine in general. Every person’s situation is different. What can be perfect for one person can create terrible problems to another one.