PayPal must report all transactions tagged as purchases to the Internal Revenue Service (IRS), even if it was a mistake. Although this transaction is reportable by PayPal, it's possible that the transaction isn't taxable. It’s always best to speak with a tax professional for any specific concerns you may have. 

Just so you know, you'll still need to provide your tax ID if your activity meets or exceeds the reporting threshold. You can learn more about what to expect for the tax season in our Help Center.