Email from PayPal. How to proceed?

Question

PayPal

Good afternoon,

Please advise what is the best way to do it.

Around March, I started working in affiliate marketing (affiliate), during this period, monthly payments to me increased from $300 to $6 thousand per month, I work with 2 contractors. The Paypal account is registered for an individual, I also pay taxes for this activity as an individual (13%). Everything is clear on taxes, I check with an accountant.

I also have an individual entrepreneur, but I don’t use it for this activity (as I was told, an individual entrepreneur is not suitable, because payments go through electronic money).

In August, Paypal was asked to verify the account - to show the passport in the Euroset salon, which was done. Now this letter has arrived:

We are pleased that you have chosen PayPal to process your payments and thank you for your patience during our checkout.

As part of our regulatory obligations, we need to verify certain information regarding the account you have opened. We cannot remove restrictions from your account until all requirements are met, please complete all the steps below to continue the verification process for your account.

Since PayPal is a financial institution, please provide the following information:

- Please explain the purpose of payments received from individuals/companies XXX, Llc., YYY, Llc.

- We ask you to provide a copy of your passport, including a spread with a valid residence permit. The edges and number of the passport must be fully visible.

You can upload the required documents in your PayPal account to provide the required information.

As I imagine, I do everything according to the law and according to the rules (but I hope that this is the case and I am not mistaken anywhere).

Tell me, please:
1. What is the purpose of specifying?
2. What are the consequences if I indicate entrepreneurial activity?
3. Does it make sense to transfer one of these counterparties from paypal to checks?
4. How to generally avoid problems with PP or tax, my goal is to do everything in a white hat, according to the law and according to the rules of Paypal?

Thank you!