The problem arises because Envato does not pay me. The money sent to my partners is sent directly from Envato to their bank account. This money is never my money, at any point in the payment process.
This is a bit of a grey area in my opinion, since technically you can use your PayPal account as your only bank account now. If you weren’t ever going to move your money into your bank account, how would the IRS track it? PayPal is your point of payment, and your “bank account” is being paid by Envato.
We do? I don’t ever recall signing my name on a dotted line, Envato doesn’t even know who I am or where I live. Clicking a button on their terms of service does not give them the right to withhold earnings because they think I could, quite possibly, MAYBE be from the U.S.
Contractual agreements don’t necessarily always require written contracts. Verbal contracts or simply agreeing to the terms of service (such as when you signed up for the account) are all viable contracts.
Furthermore, they’re only going to withhold earnings if you try to cheat them. If you read through the link (especially the one that links out to the IRS site) – it is required by law for any company to do this under certain circumstances. If you don’t provide the proper tax ID number, they must withhold a flat 28%. If you do everything the correct, legal way – then nothing really should be changing, unless you’re currently avoiding taxes.
+1 Most of the world is caught up with other devices to really appreciate the uniqueness and simplicity of WP, but I agree this would really open the doors to a whole new level of CodeCanyon. I think we should be covering a lot more ground and have categories for many non-web related submissions as well, but it takes time to put all of this together.