Verify PayPal IPN with PHP & cURL. Works for both Live and Sandbox IPNs.

Verify_PayPal_IPN.php

<?php
/**
* Verifies a PayPal Live/Sandbox IPN.
* 
* It returns NULL if freak error occurs (no connection, bad reply, bad IPN).
* It returns BOOL to signal verification success or failure.
* 
* @author Claude "CodeAngry" Adrian
* 
* @param array/null $IPN
* @return bool/null
*/
function VerifyPaypalIPN(array $IPN = null){
    if(empty($IPN)){
        $IPN = $_POST;
    }
    if(empty($IPN['verify_sign'])){
        return null;
    }
    $IPN['cmd'] = '_notify-validate';
    $PaypalHost = (empty($IPN['test_ipn']) ? 'www' : 'www.sandbox').'.paypal.com';
    $cURL = curl_init();
    curl_setopt($cURL, CURLOPT_SSL_VERIFYPEER, true);
    curl_setopt($cURL, CURLOPT_SSL_VERIFYHOST, true);
    curl_setopt($cURL, CURLOPT_URL, "https://{$PaypalHost}/cgi-bin/webscr");
    curl_setopt($cURL, CURLOPT_ENCODING, 'gzip');
    curl_setopt($cURL, CURLOPT_BINARYTRANSFER, true);
    curl_setopt($cURL, CURLOPT_POST, true); // POST back
    curl_setopt($cURL, CURLOPT_POSTFIELDS, $IPN); // the $IPN
    curl_setopt($cURL, CURLOPT_HEADER, false);
    curl_setopt($cURL, CURLOPT_RETURNTRANSFER, true);
    curl_setopt($cURL, CURLOPT_HTTP_VERSION, CURL_HTTP_VERSION_1_0);
    curl_setopt($cURL, CURLOPT_FORBID_REUSE, true);
    curl_setopt($cURL, CURLOPT_FRESH_CONNECT, true);
    curl_setopt($cURL, CURLOPT_CONNECTTIMEOUT, 30);
    curl_setopt($cURL, CURLOPT_TIMEOUT, 60);
    curl_setopt($cURL, CURLINFO_HEADER_OUT, true);
    curl_setopt($cURL, CURLOPT_HTTPHEADER, array(
        'Connection: close',
        'Expect: ',
    ));
    $Response = curl_exec($cURL);
    $Status = (int)curl_getinfo($cURL, CURLINFO_HTTP_CODE);
    curl_close($cURL);
    if(empty($Response) or !preg_match('~^(VERIFIED|INVALID)$~i', $Response = trim($Response)) or !$Status){
        return null;
    }
    if(intval($Status / 100) != 2){
        return false;
    }
    return !strcasecmp($Response, 'VERIFIED');
}
?>

for those looking at this you should VERIFYPEER and VERIFYHOST