I'm not sure you actually need to send a 1099-R at all.
The usual situation we deal with is a person with a less than 10 year marriage, where DFAS won't honor the court order and pays all the pension directly to the service person. Suppose the pension is $20,000 and $10,000 is supposed to go to the ex. If DFAS honored the order, each ex would get $10,000 and pay the tax on their portion. If DFAS doesn't honor the order, the service person gets the entire $20,000 and has to pay all the tax, but is supposed to send $10,000 (not $7800 after tax) to the ex. How to make that right. Issue a nominee 1099-R so the service person can say "I got $10,000 net and am only paying tax on my half and the ex got $10,000 and has to pay their own tax.
What seems to be happening in your situation is that the judge is recognizing that you got $10,000 too much, and is telling you, "since you already paid tax on the part that is supposed to go to the ex, you only have to pay $8000 to the ex." So it sounds like here, you just send the check for the net after-tax amount. Your ex is made whole, and you did not overpay, because although you paid tax on the whole pension, the payment you have to make is adjusted for those taxes.
I don't quite get the 8% question. I think the judge is expecting you will pay income tax on the entire pension you received. You will get a 1099-R, that will show any tax withheld to your benefit, and you will pay any additional tax owed because of your tax bracket. You then send your ex the after-tax amount you owe, not the pre-tax amount. I don't think you send an 1099 at all. That would make your ex pay income tax on money that you already paid tax on. You would only send a 1099-R if you were paying her the entire $10,000 you owed, which would force her to pay income tax (reducing her net after-tax benefit to $8000).
I think you have smart judge that has already taken taxes into account, and you have misunderstood the result of the judges action.
