First Atlantic Commerce (FAC) has hit back at claims made about its role in an investigation into First Data Corp.'s involvement in offshore tax-haven schemes.

The Denver Free Post reported last week that FAC had been targeted by the Internal Revenue Service (IRS) as part of the probe focused on merchants who deposit the proceeds of domestic sales into offshore banks to hide them from tax authorities.

But FAC, a Bermuda-based international, multi-currency payment gateway, has rebuffed those comments in a statement released yesterday, saying it was not contacted by the IRS in connection with the investigation and was not a party to the reported lawsuit.

That matter relates to what FAC claims were "certain erroneous and unsubstantiated statements" concerning itself set forth in an IRS affidavit offered in support of a John Doe Summons petition served on First Data in the 'Matter of the Tax Liabilities of John Does' filed in the District of Colorado on April 13, 2009.

The statement said that the erroneous references to FAC made by the IRS in the lawsuit were not based upon evidence obtained from the company, but on inaccurate information "apparently gleaned and misconstrued from articles, marketing collateral and the Internet".

FAC said it would co-operate fully with the authorities, as mandated by law, when and if it was ever contacted by them, to ensure that an accurate record was established.

The company went on to stress that it was not a bank and did not open or maintain merchant accounts on behalf of other businesses, while it also did not have any merchant acquiring relationships with any American bank, nor did it have a corporate presence in the US.

"FAC does not facilitate and has never to its knowledge facilitated United States tax avoidance by USA domestic merchants and FAC's multi-currency payment gateway solutions were not marketed directly or indirectly to USA domestic merchants for the purpose of United States tax avoidance," the statement read.

"Payment of any taxes regardless of jurisdiction is the legal responsibility of the merchant and is reinforced by the merchant upon signing FAC's Payment Gateway Agreements. All merchants acknowledge their tax paying responsibilities as a condition to contracting with FAC for payment gateway services."

The statement pointed out that FAC's relationship with First Data had been misconstrued and it was not a subsidiary or affiliate of First Data, Cardservice International (a subsidiary of First Data) or First Data Merchant Services (FDMS), adding that it had never received credit card settlement funds on behalf of First Data and did not maintain offshore bank accounts for or on behalf of, or in association with First Data, its affiliates or any of its US domestic merchants

Furthermore, it said that merchant credit card transactions processed by FAC gateway systems complied with jurisdictional and Card Associations acquiring regulations, which are strictly enforced.

FAC said its marketing agreement with Cardservice International was terminated in 2005 and never resulted in any US domestic merchants being placed into offshore merchant accounts by FAC, claiming it had no responsibility whatsoever for the materials distributed to the Cardservice Independent Sales Agents in relation to the marketing of offshore services to US merchants, either in print or via the online website, contrary to what the IRS Declaration stated.

In addition, the statement confirmed that FAC was a PCI compliant, certified multi-currency payment gateway with FDMS - a technical agreement for payment gateway processing connectivity only, and said it had no relationship to establishing merchant accounts for FDMS merchants - anywhere.

"FAC does not and has not knowingly processed USA domestic merchant credit card transactions through FDMS to offshore merchant or bank accounts," it read.

"There is no CSI-FAC merchant processing relationship through FDMS, no CSI-FAC merchant accounts, and no CSI-FAC credit card transactions were ever processed via FDMS for US companies under the Marketing Agreement between Cardservice International and First Atlantic Commerce Ltd.

Finally, FAC added it had no relationships of any consequence with entities alleged by the IRS to be tax shelter promoters.

"First Atlantic Commerce does not have and never has had a business, marketing or contractual relationship with PTClub or Privacy World," it concluded.

"FAC has never completed nor placed any business leads received from Liberty Enterprises and there has been no further communication with Liberty Enterprises since April 2006."