Whether it’s earnings from online scams, fraud Multi-Level Marketing programs, and shady High Yield Invesment Progrqams (HYIP), as long as it’s considered income, it’s taxable.
Any monetary benefit received from an activity, illegal or otherwise, normally becomes part of one’s taxable income.
That’s from an article published in MSN Money Central which also summarizes how they are treated under US tax laws. Take note of the following, lest you want to run into trouble with the Internal Revenue Service (IRS).