When paying a restorative payment for a settlement for a retirement account, what is a payer’s tax reporting responsibilities? Is the IRS silent on this as they are about how receiving custodian’s should report a deposited restorative payment? (interested in both if payer is a custodian or not a custodian if those are different)

If the restorative payment goes to lawyers before being deposited back in a retirement account, is this considered a distribution even though it never went to the retirement account owner?

Does the payer have the obligation to ensure the payment is returned to a retirement account by requiring it be deposited back where the loss occurred so they can see it was returned? Or by requiring documentation that it was deposited in a retirement account?