Currently, QuickBooks Online (QBO) doesn't support forms in Interchange File Format (IFF). I encourage sharing this idea to our engineers. You can do it by sending a feature request. Just click on the Gear icon at the top right corner, then choose Feedback. Our engineers will consider all requests entered there for inclusion in future updates.
For your concern on Connect to PayPal app, I encourage calling to our Customer Support Team. They'll be able to check the settings of your QBO and PayPal accounts, identify the main problem, and fix it from there.
If you have other concerns, don't hesitate to reach out to us again. The QuickBooks Community Team is always ready to answer all your inquiries.