Don't you worry about taxes because Government has no power to impose that in online transaction such as Paypal to Bitcoin,what concerns me like what the above poster is the Locking of your account in Paypal though this will valid if you use for transacting in illegal or something related that Paypal will detect.

For me what is the most important thing here?is that you need to consider using "ESCROW" though there might be a fee yet you can be sure of the safety transaction though you have already mentioned that your partner is a trusted person yet assurance is what you need here.