Can The IRS track your Paypal account?

Hi,

If my only source of income comes from Paypal and I leave the money in my Paypal account, can the IRS audit me for not reporting that money in my Paypal account?

 

Well, you are solely responsible for reporting your income even if it is done through Paypal.

However, any income earn whether you withdraw them or not is subjected to income tax reporting, as to whether you need to pay taxes in the end would depends on your deduction and the tax laws.

If your reported income and your lifestyle does not match, it could raise some red flags and you may come up for a dreadful tax audit.

 

Depends on the amounts you move in paypal. If you move more then 10 grand through your paypal account they UNDER LAW have to report it to the IRS at the end of the year.

 

You meant if I moved 10k at one time right?

 

I do not recall reading anywhere about Paypal will report any earnings on your behalf. All I read is this

https://www.paypal.com/us/cgi-bin/webscr?cmd=xpt/UserAgreement/ua/USUA-outside#receive-policy

 

Interesting, where did you hear this?

 

i think that if you earn over 800$ in one year, you are supposed to report it

 

Yeah I even think it's $600 a year you have to report it.

 

That is correct. If you earn $600 or more from any one source you are required to report it. Whoever, or whatever company, pays you in excess of that amount must supply you with a tax form 1099 (In US of course)