PayPal Takes Advantage Of Honest Mistake

For some reason when my wife set up our PayPaL account 7 years ago, she had listed the business type as non-profit (even though we were business verified and it was supposed to be labeled under a LLC). anyway, so I set up a website and asked for donations to keep it running. For nearly 5 months we got weekly donations and then all of a sudden, yesterday I get an email from PayPal asking me to give them proof that I am in fact a 501c3. I told them I was not and was told by their representative that all I had to do was change my account status (under my profile) to FOR BUSINESS (which I promptly did) and delete the paypal donation buttons on the website in question (which I also promptly did). I even offered to refund the donations if that made any difference. They still denied to lift the restrictions on my account and I am afraid that in 30 days they will totally restrict my account and freeze my funds (even though I have a TON of business related subscriptions that go through that account). Any help to avoid this mess will be greatly appreciated! 

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