IRS pressure kills Leadenhall Mastercards

tax       2003-07-29 
Effective today, all Mastercards issued by Leadenhall Bank and Trust are cancelled under pressure from the United States Internal Revenue Service, a move that will affect thousands of people.
Bank president William Jennings on Monday confirmed cancellation of the licence to provide offshore Mastercards.
Leadenhall, which was established in 1975, marketed offshore credit cards to expatriates as a means of accessing personal funds outside The Bahamas.
"Leadenhall was able to attract millions of dollars in deposits as a result of this business which was a very sophisticated operation," sources said.
The IRS views this and similar offshore credit-card operations as tax-avoidance schemes. According to the IRS, "credit cards provide easy access to offshore funds and accounts in tax haven countries that allow income to be hidden. U.S. citizens must pay tax on their worldwide income."
Mr. Jennings said the bank "has assembled a team of customer-service specialists to work with cardholders and card-related matters as a result of this decision. Cardholders will be contacted directly by the bank with account closing details."