A court order will allow the Internal Revenue Service to ask PayPal, a money transfer service owned by eBay Inc., to turn over information on customers who might be evading taxes.
A federal court in San Jose, Calif., said in February that the IRS could request account information for American taxpayers who have bank accounts, credit cards or debit cards issued by financial institutions in more than 30 countries suspected of being tax havens.
Eileen O'Connor, assistant attorney general with the Department of Justice's Tax Division, mentioned the court approval to reporters at a press conference yesterday, and added that the summons could potentially expose people making money using PayPal and not reporting the income. The request for information is part of an IRS effort launched several years ago to trace money that American taxpayers hold offshore to avoid taxes. The agency has already made similar information requests to both MasterCard and Visa.EBay purchased PayPal in 2002 to serve as its preferred online payment vendor, and more than 100 million PayPal accounts around the globe are used by buyers and sellers. In 2005, more than $27.5 billion moved through the service. A spokeswoman for PayPal said that the company just received the summons and is evaluating its options.
