We use Separate pricing to create customer groups - mainly Retail which has tax included and Trade which doesnt. If a retail customer uses paypal the amount total sent to paypal is correct; however if a trade customer uses paypal the amount sent is the total less the tax. Luckily we have had only one trade customer use paypal and it was for a small amount! In paypal_ipn.php it tests if DISPLAY_PRICE_WITH_TAX is true; this is the case if you use Separate pricing module. I think it needs to test if CUSTOMERS_GROUP_SHOW_TAX is false. To get around it for now I have allowed trade customers to only use other payment options and not paypal.