Records of US tax payers spending money on the web and using PayPal, the internet money-transfer arm of eBay, to avoid tax are to be disclos...

Records of US tax payers spending money on the web and using PayPal, the internet money-transfer arm of eBay, to avoid tax are to be disclosed to the Internal Revenue Service. The IRS is demanding the identity of customers using Paypal through offshore accounts in all offshore tax havens, including Jersey, Guernsey, Isle of Man and Gibraltar. By using PayPal, customers can buy goods from eBay and many other shopping websites, pay for them from untaxed income held offshore and get the goods sent to their home address. PayPal can be used to wash untaxed money between offshore and domestic accounts. According to the IRS: "Because the elements necessary to transfer money require only two email addresses attached to two bank accounts and/or credit or debit cards, PayPal's structure not only allows persons with monies held in a foreign account to purchase goods and services, it also allows a person with assets secreted in a foreign country to repatriate them to their own domestic bank account without going through traditional banking methods such as a bank-initiated wire transfer." PayPal has 76 million accounts and is available in many parts of the world. Latest figures show an annual total of $6.5 billion being spent through the system.