Originally Posted by BoltActionz

Also mak111,

The IRS has gotten some unique ways of analyzing some of Paypal's activities. They are aware that ebay based businesses are doing big bucks and that they are possibly missing out on potential $$$ there. The answer below may or may not work for you, depending on what country you are currently located in and what the Paypal rules and/or services are where you are currently located.

What you would be better off doing is, getting the Paypal payments to transfer to the address OUTSIDE the US that they are currently going to or another address outside the US. What I mean is, if you currently have a bank account in another country, continue to receive the money there...but arrange a way to access it from the US. If you take the example of incorporating outside the US where you are located now, then you would establish a business address someplace outside the US. Doesn't have to be anything more than a mail receiving place. Or maybe your registered agent would do this as well. And then if you get checks, they could package them up and either send them to you and you turn around and mail or FedEx them to your bank making your deposit by mail, or your registered agent could package them and send them direct to your bank for deposit into the account. If you have the ability to receive $$$ direct to the bank from your Paypal account, keep that account open and continue to receive the money that way. But what you do to prevent Paypal from freezing your account because your IP address doesn't match up with the location of your mailing address is, you contact Paypal and tell them you are traveling to the US and that you will log in from time to time and that it is not someone hacking your account but that you expect to be located in the US for a little while. That way they can flag your account with the info in such a way that they don't freeze it for the IP address/country location not matching up.

This is something that might be a little complicated depending on the volume of business you are doing. You may be required to file tax returns on the business in the country where it is located (or not). It depends on where you are located, who your customers are and where they are located, and if you are required to pay based on your country's laws.

It may be worth it, and it may be worth it to go ahead and pay whatever taxes you would be required to pay in the US. Each situation is different. Also, it may be worth it to create the separate corporation but the additional headache of keeping the records may not be of value to you so you may elect to just go ahead and forget about the separate company thing, depending on what you are up to. Not everyone is willing to deal with the additional recordkeeping and other stuff. While it doesn't have to be complicated, everyone's tolerance for details is different.

Hopefully this helps your mind to start thinking of possible solutions and gets you off to the right start, whatever direction is right for you.