In case you haven't seen the recent articles or didn't read the fine print in PayPal's latest changes to their User Agreement... PayPal will be required to file a 1099 with the IRS to report a user's transactions totaling more than $20,000 or if you have more than 200 payments to your PayPal account in calendar year 2011.

The actual verbage is...

"You acknowledge that starting in 2011, PayPal will report to the Internal Revenue Service the total amount of the payments you receive each calendar year into all the Accounts you own if you(i) receive more than $20,000, and (ii) receive more than 200 payments, in that calendar year."