1.401(a)(9)-5 A-4(a) states, "... a minimum required distribution, determined as if the employee had lived throughout that year, is required for the year of the employee's death and that amount must be distributed to a beneficiary to the extent it has not already been distributed to the employee." Since the distribution must be made to the beneficiary, the beneficiary becomes the payee. CFR 54.4974-1 (regarding IRAs) and CFR 54.4974-2 (regarding employer plans) both state that the penalty is imposed on the payee, so the Form 5329 must be included with the beneficiary's tax return. Also, only the payee can request a waiver of the penalty if the RMD is subsequently made. Since the beneficiary is the one who receives the payment and is therefore the payee, again the Form 5329 requesting a waiver of the excess-accumulation penalty must be included with the beneficiary's tax return.
