The key is “personally earn”, these people don’t personally earn it.
They setup a shell corporation which earns the money and they only take out of the shell what they need.
There isn’t anyway to stop this practice, there is no way to hold an individual personally liable for the earnings of a foreign corporation.
I think you need to report any interest in any foreign company. And I do know that you need to report any interest or authorization on any bank account that holds more than $10,000 at any time throughout the year - so if you do have a shell corporation it must be reported.
I think the IRS considers also how many own the company; if it is one person or only an family, and it is not a full corporation per US consideration (not an LLC or partnership, but an actual C corp) then you are responsible for tax on all profits. Only an actual C corp style company is tax-deferred; however, many nations do not allow foreign held C corps. They only allow S corps, LLCs, or partnerships.
Even if you can successfully defer your taxes, you still have to report your interest in that foreign company and foreign bank accounts - so the IRS can take a look at what you have around the world...