THE IRS HAS TAKEN MY TRANSACTIONS VIA PAYPAL AND IDENTIFIED THEM AS TAXABLE INCOME

PayPal also sent you a 1099 as the law requires them to if you have over 200 transactions and over $20,000 of proceeds. Both have to be true. PayPal does not mail the 1099, but you need to look online. Look under activities - statements - tax documents. If none are there, then PayPal did not generate one and the IRS did not receive one from PayPal. If the IRS has a 1099 from PayPal and your online account does not show one, then the IRS has asked for it outside the normal guidelines. 
The IRS is going after bigger fish as they don’t have the resources to go after 4 small transactions. I am sure your 1billion dollar business is the sole reason this is happening. The IRS may have asked PayPal for it as they are looking closer a folks they deem big fish.  
Just my thoughts based on what you have shared.  

Could the IRS be broke because some people bought lobbyists to write laws that were passed by legislators they also bought to exempt them from paying taxes?  Possibly these people were billionaires, but of course that is not true.

ALL billionaires are HAPPY to pay their fair share of taxes and do not need to buy legislators to pass laws that exempt them from paying taxes.  Also millionaires, of course.

This is also true for large corporations, who happily pay ALL their fair share of taxes every year.

None of these billionaires or corporations stash money overseas or incorporate in Ireland or have secret bank accounts or EVER avoid tax laws.

American billionaires and corporations and even politicians are scrupulously honest and always pay their full share of income taxes just like all of us do.  They also NEVER lie about anything.

Some of you people are supposed to be educated and American citizens who believe in our country and its laws.  Could it be that this is not true?

Naw!  Everyone on here is honest and a true, law-abiding American I am sure.  All the crooks and cheaters have certainly been banned by now, right?

Yawn.

@Nickaboy1, I see you

No richopp, they missed ONE.. I hope it's not the one bad apple thing again.. The whole bunch is BAD AGAIN!!

Ok Let's toss this bunch too.. I just wish they could JUST add and subtract.

An audit of the IRS reveled they need to be audited. BUT there was no one qualified to count all the money..

It's that corrupt.. Just like Social Security. It's so large and so corrupt, where do you start? WHO do you blame..

I have an answer though. Guillotine, just the offending parts though. Their little slush fund for paying off all the grab A$$, you got it.. OFF

A thousand a day of Mr. Guillotine at work and they would still be lined up with their hands out. Non profits (# 1 on my list), gamblers, thieves, cheats, lawyers, travel holics career politicians and lobbyist are just that, uncontrolled ADDICTS without a name put to them..

Why are they pulling out of the Afghanistan? Got tired off dropping off plane loads of money and watching it being stolen. By WHO? Who dropped it off who picked it up.. there's HALF. The US military might be pulling out but the CIA will never quit, EVER...

The money being spent in other countries is NUTS... The people doing that CRAP talked themselves into believing it's ok to be a scumbag.. Pretty simple..

I'll take a junkie or a drunk any day over the whole lot..

Regards