Gary Benton Logsdon and Karen Ruth Logsdon - Page 12

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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          of CSRS contributions that had previously been withdrawn by the             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          such withdrawn contributions were originally made.  5 U.S.C. sec.           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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