Here’s the text of an email I got today from PayPal. I’m guessing some of you might have gotten a copy too:
PayPal has received a summons from the United States Internal Revenue Service requiring us to produce various account records, including data related to your PayPal account. PayPal understands the summons relates to the IRS’ offshore compliance program in which the IRS has sought information about offshore credit card accounts from a number of companies.
Your privacy is extremely important to PayPal. PayPal is obligated, however, to turn over the requested data. PayPal has been ordered by the United States District Court for the Northern District of California to provide the information to the IRS, and PayPal expects to begin providing this information to the IRS on January 10, 2008. The summons and court order both issue from the United States District Court in an action entitled: In The Matters of the Tax Liabilities of John Does, Case No. CV-05-04176-JW.
If you have any concerns about the disclosure of this information, you should consult with your tax or legal advisor. You may have rights in connection with the summons, including the right to seek to prevent the IRS from obtaining some or all of the information. The statute of limitations that limits the time in which the IRS may assert tax liabilities against you may be suspended beginning on the date which is six months after the IRS served the summons upon PayPal and continuing until PayPal finally resolves its response to the IRS. See 26 U.S.C. § 7609(e)(2).
PayPal cannot provide you with legal advice. If you have questions concerning the summons and court order, we encourage you to contact the IRS, your tax advisor and/or your attorney.
If you wish to contact the Internal Revenue Service regarding this matter, they can be reached at (215) 516-4777.
Thank You, The PayPal Legal Team
At first I was a little alarmed. I’m duking out a potential identity theft case in Virginia, and I wondered if they were connected. But then I did a bit more research and found out that plenty of people have gotten this email in the past couple of days.
It seems that back in April of 2006 a federal court in San Jose, CA, gave the IRS permission to ask PayPal 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. The summons covers the years 1999-2004, and as I was living in Canada up until July of 2000, I guess that’s where my name came up. I’ve also purchased plenty of things on eBay from England and other European countries over the years.
Apart from the amusement factor that Canada is considered a tax haven (up there we considered the US a tax haven!) I’m left wondering why a summons served in April of 2006 isn’t seeing any action until January of 2008. It also concerns me that PayPal isn’t posting this information anywhere on their web site, particularly when this email has gone out to a large number of people. Finally I hope this isn’t the opening “shot across the bow” by the IRS with respect to online eBay sellers (which they’ve been threatening to do for awhile now).
Anyhow, just thought I’d share, in case any of you got this email and were wondering the same thing …