Received 1099-R with distribution code box7 = 7. Tubotax shows that i owe 10,000+ in taxes. This account was sized and distributions were taken by the govt. Do I pay tax?

Are you saying that the distribution was seized as part of the Treasury Offset Program? 

Well, no matter. Yes, you owe the tax on this distribution, unless there is something very unusual about this situation.

They were seized/frozen part of fraud indictment. Pleaded guilty and distribution were taken out by the govt (Federal govt or justice department). 

Yes, you do owe the tax. Distributions were made on your account. Whether it comes to you or the government, you still owe taxes on the distribution as this was your account.