They do (have to), they just choose not to.
If the IRS checked, they could be penalized.
According to the IRS:
"If you pay independent contractors, you may have to file Form 1099-NEC, Nonemployee Compensation, to report payments for services performed for your trade or business. If the following four conditions are met, you must generally report a payment as nonemployee compensation.
You made the payment to someone who is not your employee;
You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
You made the payment to an individual, partnership, estate, or in some cases, a corporation; and
You made payments to the payee of at least $600 during the year."
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