I have a friend and ex-business partner located in Serbia. He needs a Paypal account to accept payment from US customers for his programming services. He can't get one in Serbia. So because he's done a lot for me I let him use a Paypal account in my name. He gets about 60,000 per year in revenue to Paypal and spends almost that much on business expenses and then I wire him a small amount from my bank after it is withdrawn from Paypal.

It is my Paypal account, but none of the incoming transfers or outgoing payments are for me in any way shape or form. Paypal has asked for the EIN number, after providing it do I need to report this revenue as my revenue, and these expenses as my expenses? I have a signed document from my friend in Serbia stating that all of this revenue and expense are his.

This is your income, since it is YOUR account and you will be liable for paying taxes on the money. Is your friend figuring the taxes and setting up an account to pay them for you ?