Letter From Paypal, "Notice Of IRS Summons

Discussion in 'General Discussion' started by Quigley_Sharps, Jan 6, 2008.

  1. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

    According to the San Jose Mercury News, the IRS won court approval to ask PayPal for account information on customers who have sent money to financial institutions in 30 countries known to be tax havens. Articles below. Would love to see the papers and the order in this case. I suspect that PayPal will assert that the IRS is in violation of the Right to Financial Privacy Act. The Right to Financial Privacy Act (12 USC 3401 et. seq.) generally prohibits Federal agencies from obtaining information from financial institutions which is derived in any way from account information or records. The definition of financial institution is pretty broad and covers issuers of credit cards, which I believe PayPal qualifies as. Note that if PayPal doesn't qualify as an issuer of credit cards, I don't see it falling under this statute. Online payment services, stored value, electronic money, etc, not issued in connection with a bank or similar institution is not protected by the RTFP. I've said for a while that the RTFP needs to be updated to cover financial new products like PayPal and stored value. One exception to the RTFP is if the agency obtains a valid judicial subpoena which meets the requirements of 12 USC 3407. That section requires that (1) the subpoena be authorized by law, (2) a copy be served upon the customer or mailed to his last known address along with a notice of the customers rights, including the right to oppose the release of the information before the court (3) ten days from date of service or 14 days from date of mailing notice have passed and the customer has not moved to quash the subpoena. I'm not sure what legal authority for the subpoena is being cited here -- it doesn't sound like there exists probably cause to look at all customers who have sent money to one of 30 countries. Will be interesting to see how the service/notice issue is handled. As I read the statute, the FI (PayPal in this case) would not have to respond to a subpoena until the requesting agency (the IRS in this case) demonstrates that it sent notice. Meaning that the IRS has to find and notify these people without PayPal's help. Given that it sounds like the IRS doesn't even know who these people are, I don't know how they would comply with the notice provision. stm-----------------------------------------------------------------------------------------------Posted on Tue, Apr. 11, 2006Government wants PayPal to help it find tax evadersBy Frank Michael RussellMercury News Assistant Business EditorThe IRS wants PayPal's help finding tax cheats who are hiding income in other countries.Tax officials won permission from a federal court in San Jose to ask PayPal for account information for customers who have had money sent to financial institutions in 30 countries known to be tax havens, according to an Associated Press report. The request will involve transactions from 1999 to 2004.PayPal, the online payment service owned by San Jose e-commerce giant eBay, said it has just received the summons and hasn't decided yet how it will proceed. ``We're still evaluating our options,'' spokeswoman Amanda Pires told the AP. ``The privacy of our customers' information is something we take really seriously.'' ---------------------------------------------------------------------------------------------------- Posted on Tue, Apr. 11, 2006IRS asks PayPal for help finding taxpayers hiding income offshoreWASHINGTON (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.In some cases, the IRS obtained credit card numbers but could not identify the cardholder. The IRS said PayPal might be able to lead the tax agency to those individuals.The IRS also hopes PayPal can help them identify currently unknown taxpayers' and their payment cards , as well as offshore bank accounts, that might be evidence of tax evasion.The request covers transactions occurring from 1999 through 2004**********************************************************************For Listserv Instructions, see http://www.lawlists.net/cyberiaOff-Topic threads: http://www.lawlists.net/mailman/listinfo/cyberia-otNeed more help? Send mail to: Cyberia-L-Request@listserv.aol.com**********************************************************************</PRE><!--X-Body-of-Message-End--><!--X-MsgBody-End--><!--X-Follow-Ups-->
  2. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

    <TABLE height=106 width=561 border=0><TBODY><TR><TD vAlign=top width=560>[​IMG]
    [​IMG]</TD><TR><TD width=561 height=106>Notice of IRS Summons
    Dear Mr Survival Monkey,
    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. ยง 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 </TD></TR></TBODY></TABLE>
  3. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

  4. ghrit

    ghrit Bad company Administrator Founding Member

    Fishing expedition, that's all it is, just casting a net. There is (somewhere) an article on how the IRS has subcontracted private eyes to track down tax evaders, seems like there is a serious movement afoot to recover lost revenue.
  5. Blackjack

    Blackjack Monkey+++

    Damn, now there going to find out I really I have millions in the Caymans.

    The IRS really needs to go.
  6. melbo

    melbo Hunter Gatherer Administrator Founding Member

    Was the email actually addressed to your real name?
    I read the Snopes link so it is legite.
    But, It looks like they are looking at offshore credit and debit cards stuff.
    That doesn't sound like you.

    I didn't get one.
  7. Quigley_Sharps

    Quigley_Sharps The Badministrator Administrator Founding Member

    They are on to my lottery winnings
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