Paypal & IRS: no longer in USA

francisco · #1 01-28-2011

Hey guys,

So here is my situation.

I received a request from PayPal for my Tax ID or Social number, so they can start reporting my earnings to the IRS. I do not use eBay, just Paypal for my website.

Here is the thing. I do not live in the US, but my bank account is in the US and I am a US citizen.

I made over $20000 last year but only a few thousand for 2011 so far. I know that the new rule starts in 2011 so I still have a little time to buy before I reach the 20k threshold.

So, I am thinking that I only have 3 options here and want to get some opinions on which one is my best.

1- I change all my information in PayPal to use my Hong Kong bank account and Chinese address so I am no longer affected by this (hopefully?).
2- I open a whole new account using my Hong Kong bank and Chinese address and stop using the old one on my website.
3- I have my girlfriend use her Chinese bank account with Chinese address. I think this is the least desirable since Chinese people can only take out 50k from the bank unless they have a business account

I am currently living in China and even have my temp residents permit, so if I change all my PayPal info I shouldn’t have to submit anything to the IRS right?

If I do have to submit then would having my website change to a Chinese PayPal account trigger a red flag?

Please help me out here guys. Thanks in advance!

rsot · #2 01-28-2011

Welcome to the forum first of all. Look forward to see more of contributions with experience for sure since you seem to be operatign with pa yp al for large amounts.

That being said, when pa yp al asks for something, that's it - you either have to provide it or you CALL them and start a conversation with an agent + manager to avert the situation. Once you receive a request, you can't change your info just to avoid that - they will ask for the initial info AND new info so you get bogged down.

Is your account limited? None of the 3 options you have proposed will work well with this old account - if you do any of this I would highly recommend doing that with FRESH NEW UNLINKED account.

francisco · #3 01-28-2011

Hey rsot,

Thanks for the warm welcome.

They did not limit my account in any way yet. I think they are just getting people ready for when they hit the 20k mark. They know I did more than that last year, so I think that is why I am getting it early this year.

What I really want to know is that if I simply stop using the account, then open a new account using totally new information from my Chinese girlfriend and then link it to my website, will this work to bypass there whole IRS tax thing.

I already transferred the domain to my girlfriend, so technically it is her site now. I figure this would be treated the same as if someone sold their website to someone and that person obviously had to change the Paypal account associated with that website.

Also, I was thinking about starting a brand new account, but with my personal information in China. So the first and last name would be the same, but address and CC would be different (China information, no US reference).

Only reason I prefer to have it in my name is because Chinese are limited to 50k in transactions per year for personal use...

Please let me know what you think.

Thanks for you help!

francisco · #4 02-02-2011

Ok, so I have decided to just use a new Chinese account with my GF info so I do not have to claim taxes.

Now here is my question before I do this.

Every time I used Paypal before I used a VPN so I had an American IP. When I sign up for the new Paypal account I will only use the IP address from the router but I will use the same computer, is this OK?

If not how can I make it look like it is a different computer?