Of course they don't report earnings. They're not based in the United States, they're based in countries that don't even have an income tax. But you do have to report it. You must report *ALL* earnings, regardless of where its from and how legal it is. It is taxed as ordinary income, which means you're only paying 35% of it if you're already bringing in six figures elsewhere. It is not capital gains. If you fail to report and get caught or audited, you could face penalties, fines, back interest, and even civil forfeiture.