| 11:47 pm on Apr 12, 2006 (gmt 0)|
I don't get it, why is Paypal where fraud like this would occur? How are they different from say any other bank?
| 12:40 am on Apr 13, 2006 (gmt 0)|
A large number of payments for services and products are made through paypal. Many people tend to just ignore these payments as they can be recycled.
You get paid for a service, don't report it, use it buy a flat screen plasma from ebay and everyone but IRS gets their cut.
| 2:02 am on Apr 13, 2006 (gmt 0)|
I highly doubt Paypal hasn't been handing over records on a regular basis. It's insane to think this is the first time paypal has been asked by the IRS for records. I could easily hide 10-20k a month through paypal and spend it as I please with my debit card or online through paypal. I think there is a reason why they ask for your SS# or Tax ID when they give you a debit card. And it's not just for patriot act compliance.
I'm just waiting for my next audit and the agent asking if I have a paypal account and then showing me my paypal records and how there is 150k in unreported income.
| 4:15 pm on Apr 13, 2006 (gmt 0)|
|How are they different from say any other bank? |
1) Millions of eBay users don't use other banks. And since a lot of eBay sellers don't consider themselves a "real" business, they probably don't report their income.
2) eBay is probably more closely tied to e-commerce than other banks, at least for small-sized businesses. As with #1, many probably under report their income.
3) With the ease and low cost of sending money to other countries, PayPal makes it easier to shift money around to/from other countries.
Also, in many ways, PayPal isn't any different from other banks. When the IRS asks other, "offline" banks for the same type of information, it's not newsworthy. But because the same story involves the Internet or e-commerce, suddenly it becomes newsworthy. Or perhaps it is newsworthy because the editor felt it could build on the recent government vs. Internet news lately (DOJ vs. Google, etc.).
| 5:51 pm on Apr 13, 2006 (gmt 0)|
|How are they different from say any other bank? |
International transfers with Paypal are much cheaper than with most US banks. At least that's been my experience with smaller amounts. Banks charge a percentage (often hidden in the exchange rate) and a fixed amount in addition to that. Paypal only charges a percentage.
| 6:30 pm on Apr 13, 2006 (gmt 0)|
PP and ebay have been cooperating with the UK revenue for some time.
There are also big plans to move into the ebay area, specialist departments are being set up to do just that.
On a side issue PP has long been associated with money laundering fullstop.
I know someone who works in a bank and they are not keen on businesses who use PP due to the IR and VAT man interest (no it's not a competition issue before the PP fan club pipe up).
It has been a favourite way for drug money to be washed as well. Ficticious goods are bought and the seller declares the income as taxable. Instantly washed and relatively cheap.
Been going on for ages!
| 8:51 pm on Apr 13, 2006 (gmt 0)|
And for the third time :) :
|I don't get it, why is Paypal where fraud like this would occur? How are they different from say any other bank? |
Because they are not a bank at all.
They are unregulated, unsecured, peer to peer transactions mediator.
They set their own rules and they have much more freedom to do whatever they want with your money compared to a regular, regulated banking institution.
Bank=Secured money, backed by state; free to use it at your own will
Paypal=unregulated, unsecured payment system, owned by a private company; high risk for money holders but also a good opportunity for some.
The following link is recommended to understand the difference, Appendix III being the most informative:
| 10:20 pm on Apr 13, 2006 (gmt 0)|
The reason is plain and simple...
The US federal gov't is desperate for money. It is addicted to grossly wasteful spending...so it is trying to confiscate every dollar it can find.
The article stated that Ebay believes the target of the probe is US citizens with foreign addresses to evade taxes, but mark my word...
The IRS is after people that do such things as buy pots and pans from estate sales or flea markets and auction them on Ebay. It will prosecute a couple of people to set an example and scare the "little people" into "compliance".
|Sounds like the government wants its fair share. |
It gets an unfair share as it is.
| 12:48 am on Apr 14, 2006 (gmt 0)|
It's another "sketchyness of Paypal" thread!
| 3:41 am on Apr 14, 2006 (gmt 0)|
Dont Lie Cheat or Steal.
First, it's illegal
Second, The US Govt hates the competition
| 12:57 pm on Apr 14, 2006 (gmt 0)|
|Second, The US Govt hates the competition |
A most enlightening observation Ledfish...so very true.
The Federalists now want to tax the pots and pans the poor peasants trade on Ebay. How quickly our memory fades...just a few generations ago we went to war with England because it excised a small tax on stamps and tea.
The cirle remains unbroken.
| 1:38 pm on Apr 14, 2006 (gmt 0)|
|Paypal=unregulated, unsecured payment system, owned by a private company; high risk for money holders but also a good opportunity for some. |
Don't know how it works in the US but paypal are regulated by the FSA the same people who regulate the banks and In the UK banks are private companies too.
| 3:42 pm on Apr 14, 2006 (gmt 0)|
When is the last time you heard of a bank that is still in business losing a lawsuit for $9 million after locking down peoples accounts for no good reason and taking their money?
| 5:00 pm on Apr 14, 2006 (gmt 0)|
|You get paid for a service, don't report it, use it buy a flat screen plasma from ebay and everyone but IRS gets their cut. |
Not to mention you get cash back from paypal for credit card purchases made with your debit card. Another loophole down the drain, big brother has their snout in everything.
| 3:12 pm on Apr 15, 2006 (gmt 0)|
People still use PayPal? Now THERE'S a story.
| 8:36 pm on Apr 15, 2006 (gmt 0)|
You also have to realize that pay pal is not regulated like banks currently. They act like a bank but are not regulated. Banks that fall under the FDIC will report excessive money transactions to the federal govt as required by law. Pay Pal does not follow this rule. There is a lot of talk on other message boards about money laundering schemes using pay pal.
I see this as a good move because now pay pal will have to follow banking laws. They will no longer just be able to close your account and hold money for 180 days. They will have to start following banking practices and laws will protect consumers and sellers.
Right now pay pal is the judge and jury for refunds and has its own laws. Soon they will regulated and they will have to follow stricter guidelines.
Its a good thing, I hope the federal govt starts regulating pay pal.
| 4:29 am on Apr 18, 2006 (gmt 0)|
The Federalists now want to tax the pots and pans the poor peasants trade on Ebay
Ohhh if it was only the case. I do very little with paypal and it adds up to 20k a month. They don't care about the little people. They want the businesses hiding 100's of thousands through paypal. I've been tempted, but it just isn't worth it. Hell my neighbor netted 50k through ebay and paypal last year and didn't report a penny. They asked me what I thought. And they didn't like my answer... But then again they haven't dealt with the IRS before.
| 7:08 pm on Apr 18, 2006 (gmt 0)|
|I could easily hide 10-20k a month through paypal and spend it as I please with my debit card or online through paypal |
How so? Your name and bank info are attached to your account, which means a paper trail.
| 8:23 pm on Apr 18, 2006 (gmt 0)|
|Your name and bank info are attached to your account, which means a paper trail. |
Up to now, no one has been following the paper at PayPal, so no worries. Now that the IRS is looking for paper trails, those who have been leaving the trails need to start worrying.