Paypal limits one's account in various situation.
For example if there is a charge back in your account or if you have exhausted the limits in withdrawing or sending or if there is a fraudlent exchange etc,
In all the above cases no matter what the issue is Paypal wants to make sure that you are the only one using your account and have full sense of what transactions you are making. At the same time it looks to extend the limits of the account.

In all the cases all you need to submit is your documents of proof for lifting the limitation and nothing more is needed ...