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IRS may ask PayPal for customers' offshore data

WASHINGTON -- The Internal Revenue Service won approval from a federal court to ask PayPal to turn over information about people who might be evading taxes by hiding income in other countries, officials said yesterday.

A federal court in San Jose, Calif., gave the IRS permission to ask PayPal Inc. -- 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.

A 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 Inc., 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 taxes.

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