I have a different answer:
When the bond owner dies, the accrued interest may be treated as income in respect of a decedent.
In that case, the new owner of the bonds becomes responsible for the tax on the interest accrued during the life of the decedent. (The tax isn't due, however, until the new owner cashes in the bonds.)
The executor CAN go back and amend to report on the decedent's final income tax return. That could be a tax-saving choice if he or she is in a lower tax bracket than the beneficiary. If that method is chosen, the person who gets the bonds only includes in his or her income the interest earned after the date of death.
But, to answer your question, no taxes are owed until the bonds are cashed,in your situation.
You can do this by going to a bank. They will give you a 1099 shortly after the transaction
OR withing two months after the following January, so you can include it in your income for that year.
SO, NO penalties, AND they aren't taxable until you cash them in, AND you don't have to cash them all in at the same time.
Hope this helps