The IRS does not know that you had no tax liability from that until you tell them on your tax return. If you do not report it, then in just under a year you can expect a letter from the IRS telling you that they have information about income that you did not report. They will helpfully include a bill for penalties and interest on the entire amount of the proceeds. You can save yourself a lot of grief by filing a tax return and reporting the 1099-B.
