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II. Deemed Deposits
Some CSRS participants owed the Fund either a deposit or
redeposit for civilian service. The former represents the amount
retiring Government participants must pay into CSRS to obtain a
credit in determining the retirement annuity for a period in
which they were Federal employees but did not contribute to the
Fund. 5 U.S.C. sec. 8334(c) The latter represents a redeposit
of CSRS contributions that had previously been withdrawn by the
participant but which may be redeposited to obtain credit in
determining the retirement annuity for the period during which
such withdrawn contributions were originally made. 5 U.S.C. sec.
8334(d); see George v. United States, supra at 380-382.
The CSRS deemed those participants who elected the
alternative annuity and owed the Fund either a deposit or
redeposit as having paid the amount due (deemed deposit or
redeposit, respectively) in the year in which they received their
lump-sum credit. 5 C.F.R. sec. 831.2206 (1991). The CSRS
reduced the lump-sum credits of the participants by the deemed
deposit or redeposit but regarded the unreduced amount as taxable
to the participants for Federal income tax purposes. Id.
Petitioners argue that, if we hold that Mr. Logsdon's lump-sum
credit must be included in their gross income, then the amounts
representing deemed deposits or deemed redeposits should be taxed
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