If you live in the U.S., you will receive tax information from the company you are making the commissions from if they are over $600 per year. Paypal is just a way to get your money....if you don't earn it FROM paypal, then you won't be getting any tax forms from them.
being paid w/paypal does not remove the irs eyeballs and responsibilities of affiliate networks and marketers, so following proper protocol is recommended.