Does Paypal Report income to the IRS?

Does anyone know if Paypal reports anything to the IRS?

For example, let's say I wanted to conduct business via paypal transactions .. will they report my income to the IRS and then I have to pay tax on it?

 

From what I have heard they are getting in to bed, so be prepared to be outed.

 

Even if they don't, you have to pay that anyway...if you're planning on commiting tax fraud talkng about it publicly isn't the best way to go.

 

I was asking on behalf of a friend who wants to use paypal for business. Hehehehe.

 

Is that friend registered on DP with the user name "whiteshark"?

 

You have to pay taxes on any net income from a business - unless you are open to the idea of sharing a cell with Richard "Naked Guy" Hatch.

 

You will eventually have to pay taxes

 

They report more than you think. If you have any significant deposits, it's reported to the government (see patriot act for starters).

That's been going on for a bit now. The IRS code is being tightened up some to force places like Pay Pal to report directly to the IRS. Still, unless you are making $30 a year, it's probably in some government file.

Pay your taxes. I mean, tell your "friend" to pay his or her taxes.

 

What I know of the IRS in many countries have a close co-operatiom with PayPal. So money you get on paypal you should really pay taxes on.

//Andreas

 

The IRS only exists in the United States.

And no. Paypal does not currently report earnings to the IRS.

 

Paypal probably only reports transactions of $10,000 or more to some financial or banking division of the US government. Those records would be accesible and probably occaisionally looked at by the IRS.

But as many low dollar transactions as paypal does, especially considering as many countries are involved, it would be pointless for Paypal and the IRS to review these transactions.

However, if you ever get audited the damn straight the IRS will be looking at your paypal account. Paypal would certainly provide transactions on a certain individual if requested by the IRS or federal courts.

 

I do not think so becouse they are not the ones who does pay you they just process transactions it is like visa or mastercard do they report to IRS - no.

 

"The Internal Revenue Service won approval from a federal court to ask PayPal to turn over information about people who might be evading taxes by hiding income in other countries, officials said Tuesday.

A federal court in San Jose, Calif., gave the IRS permission to ask PayPal Inc. — a company that enables online money transfers — for account information for American taxpayers who have bank accounts, credit cards or debit cards issued by financial institutions in more than 30 countries reputed to be tax havens."

Full Story:

http://www.msnbc.msn.com/id/12271272/