IRS summons PayPal info on offshore bank users

IRS summons PayPal info on offshore bank users

IRS asks PayPal for help finding taxpayers hiding income offshore

WASHINGTON (AP) - The Internal Revenue Service won approval from a federal court in California 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 gave the IRS permission to ask PayPal --
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.

PayPal spokeswoman Amanda Pires said the company just received the summons.

``We're still evaluating our options,'' she said. ``The privacy of our customers' information is something we take really seriously.''

PayPal enables individuals and businesses around the globe to send and receive money online. In 2005, users moved $27.5 billion through the money transmitter. The company, owned by eBay, has 100 million account holders globally.

The request for information is an outgrowth of an IRS effort, begun several years ago, to trace money that American taxpayers hold offshore to avoid paying taxes. The IRS said many of those taxpayers access their money through credit and debit cards. The tax collectors have already obtained information from some credit card companies, merchants and payment processors.

``PayPal is another one of the mechanisms by which money stashed overseas might be spent,'' Eileen OConnor, assistant attorney general for the Justice Department Tax Division, told reporters.

The request covers transactions occurring from 1999 through 2004.
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