I don't know why. They simply don't give any support and are not opened to negotiate. They just closed my account and don't want me as client. I'm using Freelancer.com instead and it works very well.

Elance sucks, they closed my account for no reason and stopped paying me reeased funds from my client

Elance handles it all for you, definitely not a scam. Funds are put in escrow and then are released when you f finish the job. Best company as far as I'm concerned!

You get paid through the elance escrow. When a client posts a job with a certain price, they have to put that money with elance. When the job is completed, the funds get released. If the client doesn't pay, elance handles that and gets you paid.
They have W2 information on their site and how to do all of that. But yes, you get a w2.