Part of it has to do with 9-11 and the new financial banking laws about 'knowing who the account holders are'. Same as you need to provide if you open up a P.O. or Mailbox Etc.. You have to show I.D. or Corp Docs.
Also, there is a new tax law. You will be getting a 1099 from Paypal and other alike services.
Quote:
IRS to Track Online Sellers' Payment Transactions Beginning Next Year
Submitted by xntryk1 on Mon, 03/08/2010 - 12:34
in
* Daily Paul Liberty Forum
By Barbara Weltman
AuctionBytes.com, March 07, 2010
Internet sellers who don't report their sales will no longer be under the radar. Starting next year, any bank or other payment settlement company that processes credit cards, debit cards, and electronic payments such as PayPal will have to issue information returns telling the IRS what merchants receive. The new returns are Form 1099-K, Merchant Card and Third-Party Payments.
Purpose of Reporting
The IRS believes that many online sellers fail to report their transactions. Some don't report because they mistakenly believe that Internet sales are invisible. Others do so because they are trying to evade taxes.
The IRS has found that using information returns, such as W-2 forms for employees, Form 1099-MISC for independent contractors, and Form 1099-INT for bank interest, goes a long way toward improving the reporting of income. IRS computers can match income reported on these information returns with the income reported on tax returns.
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http://www.dailypaul.com/node/128278
Obviously this article is not the be all, end all. Just found quick example on it. My accountant had told me about this new law and impact with PP (as a lot of my hosting clients pay that way). So check with your C.P.A. about this new law, and impact of your EPASS and PP or other such monies received and impact on your taxes.
