I received notice last month that I am the beneficiary of an IRA owned by a distant relative who died in 2007 at age 55. I am 25. The IRA holds a variable annuity with a value of $45,000.

I want to roll the deceased’s IRA into an inherited IRA. It’s my understanding that I now have to take the RMDs for 2008, 2010 and 2011 and pay 50% of the 2008 and 2010 RMDs as penalties (RMDs for 2009 were suspended). Does anyone know of a way to legally avoid paying the penalties since I was not notified of the existence of the IRA until last month?

Secondly, if I do have to pay the penalties, can I file a Form 5329 with my 2011 tax returns to cover the combined ’08 and ’10 penalties (even though the form will refer to penalties related to not taking a 2011 RMD) or will I have to file amended returns for ’08 and ’10?