It's not just PayPal, so don't let anyone tell you otherwise, in fact the law does not even mention PayPal by name. There is something in the Housing Assistance Act of 2008 under Credit Card Information Reporting. It basically says banks and credit card payment providers (Amazon FPS, Google Checkout, PayPal, CitiBank, etc.) are to file a report on anyone who receives deposits totaling more than $20,000 in payments in a single year AND receive over 200 transactions in one year. If you are a small time Seller on eBay, then this will not affect you. If you are a legitimate Seller and already report your income to the IRS, such as on Schedule C, this basically means nothing to you. Remember, this may not even take affect, and if it does, it will not just affect PayPal, but all companies that Process Payments. There is also a chance that this could get overturned before 2011.
... View more