PayPal Customer Records Wanted by IRS
PayPal may not be the tax-free safe harbor that some folks always thought it was. According to David Utter of WebProNews, the Internal Revenue Service has requested the records of some PayPal customers who may be using PayPal along with offshore credit cards to avoid filing income taxes with the IRS.
PayPal will likely cooperate with authorities should a federal judge in San Jose allow the Internal Revenue Service to request those customer records; a spokesperson for PayPal told Mercury News she could not comment specifically on this case as PayPal hasn’t seen the request.
The IRS believes more than $40 billion in tax revenue goes uncollected due to abuses of credit cards linked to countries with less than stringent money transfer policies, and bank secrecy laws that prevent them from cooperating with American authorities. These tax havens provide a shelter for income that is illegal under US law.
Federal investigators told the court they have already requested information from credit card giants MasterCard and Visa as part of the investigation. The PayPal information would be needed to further identify violators.
