Account details disclosed to the US Inland Revenue Service by PayPal

PayPal, the largest online banking services company threw its customers into a shock by revealing privileged client account information to the US Inland Revenue Service (IRS). PayPal was requested to provide the information about various accounts connected with the use of offshore credit cards. The result of PayPal’s action was that some online gamers received notices from the IRS indicating that their accounts were under investigation.

Edward Leyden, the president of iMEGA, the Interactive Media Entertainment & Gaming Association expressed his suspicions concerning the IRS investigation which may have little to do with online gambling at all. This attitude is shared by a number of commentators on online banking connected to the gambling industry who think that such investigations are being used as a ruse by the IRS to access persons with unclaimed income.

As for PayPal’s movement, it is quite clear in light of its previous settlement payout when the payments processor was indicted on the count that it had supplied services to offshore gambling sites in contravention of the 18 US Code 1960 that prohibits fund transfers "derived from a criminal offense", and 18 US Code 1084 that refers to the transmission of information on wagers.