Actually the law says you as the earner must report all income*, but IMO the only way they can know you earned that income is:

A - by a 1099 being filed by the employer (ie over $600) B - the IRS auditing an employer and finding all the payments on the expense side of their returns.

*From the IRS site:

Independent contractors must report all income as taxable, even if it is less than $600. Even if the client does not issue a Form 1099-MISC, the income, whatever the amount, is still reportable by the taxpayer.

Fees received for babysitting, housecleaning and lawn cutting are all examples of taxable income, even if each client paid less than $600 for the year. Someone who repairs computers in his or her spare time needs to report all monies earned as self-employment income even if no one person paid more than $600 for repairs.