I use my PayPal account like a savings/checking account and often will transfer large amounts of money between my PayPal account and CitiBank.

My question is whether taxes will kill me transferring a lot of money into my CitiBank account all at once, since PayPal isn't a government-recognized bank?

You mean, income taxes? You pay income taxes on INCOME, regardless of where you store it. Money sitting in Paypal is not tax-exempt.

If you're not referring to income taxes, please clarify so I can provide you more inexpert advice, for which I will not be held liable!