PayPal turns over account records to IRS

Earlier this year, PayPal let customers know the company would be providing the IRS with some of their account information. This was in response to a 2006 federal court ruling that the IRS could ask PayPal, a global leader in online payments with more than 63 million accounts worldwide, to hand over account information on American taxpayers with bank accounts, credit cards, or debit cards from foreign financial institutions.

"Your privacy is extremely important to PayPal. PayPal is obligated, however, to turn over the requested data," read a notice that was sent to PayPal customers.

The U.S. District Court for the Northern District of California made the ruling. PayPal said it would start handing over information in January of this year. The information was required to be turned over by April 29, according to gambling911.com.

Snopes.com reported that the request for information is part of an effort to trace money that taxpayers in this country hold in offshore accounts to avoid paying taxes. The site quoted Eileen O’Connor, assistant attorney general for the Justice Department Tax Division as saying, "PayPal is another one of the mechanisms by which money stashed overseas might be spent."

Onlinecasinoreports.com said some observers have described the move by PayPal as nothing short of shocking. The site reported, "The common understanding of commentators on online banking connected to the gambling industry is that such investigations are being used as a ruse by the IRS to access persons with unclaimed income."

On its Web site, PayPal bills itself as the safer, easier way to pay without exposing your credit card or bank account number. The service is available in 190 markets and 17 currencies worldwide.

You may like these other stories...

Federal film credits are not new, but they are becoming big business in more ways than one. Approximately forty states receive federal film credits they can use to entice moviemakers to make motion pictures within their...
By Deanna C. White, CorrespondentUniversity of Portland accounting student Ingrid Nelson said she became interested in a career as a CPA because it offered her both credibility and flexibility – a solid foundation in...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Already a member? log in here.

Upcoming CPE Webinars

Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.