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Campbell’s demotion and to restore her to her previous position
effective December 12, 1990. The MSPB further ordered OTS to
issue a check to Mrs. Campbell “for the appropriate amount of
back pay, interest on back pay, and other benefits under the
Office of Personnel Management’s regulations”.
Prior to the date the Order was issued by the MSPB, Mrs.
Campbell transferred employment first to the General Services
Administration (GSA) and then to the Federal Deposit Insurance
Corporation (FDIC). As a result of these transfers, the Federal
Government was required to satisfy its obligations under the
Order from separate agency funds. Mrs. Campbell received
payments under the Order from OTS, GSA, and the FDIC.
At some point not disclosed in the record, Mrs. Campbell
disputed whether payments from the FDIC reflected the total
amount the agency was obligated to pay her under the Order. In
2002, the FDIC and Mrs. Campbell agreed that she was due a final
payment of $1,446 under the Order. Thereafter, the FDIC issued a
check in that amount to Mrs. Campbell and reported the payment to
petitioners and respondent on a Form 1099-MISC, Miscellaneous
Income. The FDIC did not withhold FICA tax, Federal income tax,
or State income tax from the gross amount of the payment.
Petitioners did not include the $1,446 payment from the FDIC
in gross income on their timely filed 2002 Form 1040, U.S.
Individual Income Tax Return. Respondent determined that the
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