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ISCR Case 17-03024.a1 — CASE

Case record

A decided public DOHA case, shown for research, not advice or a prediction.

Decision Date9/6/2019
Statusunknown
LevelAPPEAL
TypeSTANDARD ISCR
Related decisionsSee the appeal decision (Case 17-03024.a2) →See the hearing decision (Case 17-03024) →See the hearing decision (Case 17-03024) →
Participants
Applicant Representation: Pro Se
Judge: Michael Y. Ra'anan, James E. Moody, James F. Duffy
Government Counsel: James B. Norman
Guidelines Evaluated
- Guideline FFinancial Considerations · Against Applicant
- Guideline GAlcohol Consumption · For Applicant

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ISCR Case 17-03024.a1unknown

Case Headnote

ISCR Case No. 17-03024.a1

Sep 6, 2019· Hon. Michael Y. Ra'anan· appeal

Summary

This security clearance case involved an applicant representing himself, with concerns raised under Guideline F (Financial Considerations) and Guideline G (Alcohol Consumption). The primary issues centered on alleged tax filing deficiencies and delinquent debts.

Specifically, the judge found against the applicant regarding allegations of failing to file tax returns for the years 2013 through 2016 and owing associated debts. While Disqualifying Condition F.3 was raised, Mitigating Condition F.2 was applied.

However, the appeal board determined that the judge made an error by not adequately addressing conflicting evidence concerning the applicant's tax filing dates. Consequently, the case was remanded for further review to resolve these evidentiary conflicts. No final outcome on the security clearance has been reached.

Conditions Referenced

Disqualifying

F.3raisedFailure to File or Pay TaxesThe judge found against the applicant on allegations of failing to file tax returns for 2013-2016.

Mitigating

F.2rejectedThe Conditions That Led to the Financial Problems Were Largely Beyond the Person's ControlThe judge did not find sufficient evidence to apply mitigating conditions.

Key Rule Quoted

“A Judge’s task is to resolve apparent conflicts in the evidence.”
— ISCR Case No. 14-00281 at 4 (App. Bd. Dec. 30, 2014)

Procedural Posture

SOR issuedMar 12, 2018
Answer filed—Applicant represented himself.
Hearing heldJun 26, 2019Decision issued after considering the record.
Decision dateSep 6, 2019Appeal decision remanded.

Cite For

Remand for Further Review of Tax Filing Deficiencies
Conflicts in Evidence Regarding Tax Filings
Judge's Obligation to Resolve Evidence Conflicts

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Appeal at a glance· Full written decision

Remanded

The appeal involved a denial of a security clearance based on financial considerations and alcohol consumption. The applicant contested the findings related to tax filing deficiencies, arguing that the Judge did not adequately address conflicts in the evidence regarding the filing dates of his tax returns. The Board found that the Judge erred and remanded the case for further proceedings.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowLeRoy F. Foreman — denied the clearance (split findings)

Decided onthe written record

Guidelines belowGuideline FGuideline G

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantError sustained
The Judge erred in failing to address the contradiction in the IRS tax transcripts regarding the filing dates.

Why the Board ruled this way

The Judge failed to resolve conflicts in the evidence regarding the tax filing dates, which is critical to the decision. Given the remaining delinquent debts, the error was not harmless, necessitating a remand for further proceedings.

Ignored material evidence

On remand, the judge must

The Judge must reopen the record to provide the parties an opportunity to present evidence and address the apparent conflict in the tax transcripts about tax return filing dates and to issue a new decision in accordance with the Directive.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appeal

Appeal Board panel

Michael Ra’anan — Chair
James E. Moody
James F. Duffy

Descriptive structured reading of this decided, public Appeal Board decision — what the case says, not a prediction or advice.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

APPEAL

SYNOPSIS

KEYWORD: Guideline F; Guideline G DIGEST: A Judge’s task is to resolve apparent conflicts in the evidence. See, e.g., ISCR Case No. 14-00281 at 4 (App. Bd. Dec. 30, 2014). In light of Applicant’s SOR response denying the alleged tax filing deficiencies, we conclude the Judge erred in failing to address in his decision the contradiction in the IRS tax transcripts about the filing dates and then explain how he was resolving those conflicts. Given that Applicant’s remaining delinquent debts total about $2,500, we cannot conclude a possible error in finding against Applicant on the tax filing deficiencies was harmless. Adverse decision remanded. CASENO: 17-03024.a1 DATE: 09/06/2019 DATE: September 6, 2019 ) In Re: ) ) ---------------------- ) ISCR Case No. 17-03024 ) ) Applicant for Security Clearance ) )

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On March 12, 2018, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision—security concerns raised under Guideline F (Financial Considerations) and Guideline G (Alcohol Consumption) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a decision on the written record. On June 26, 2019, after considering the record, Administrative Judge LeRoy F. Foreman denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. The Judge found against Applicant on SOR allegations asserting that he received a Chapter 7 bankruptcy discharge in 2017; that he failed to file his Federal income tax returns for 2013-2016 as required; that he owed about $740 in state regional income taxes for 2013; and that he owes about $1,700 in Federal income taxes for 2013-2016. The Judge found in favor of Applicant on two other Guideline F allegations and all of the Guideline G allegations. The Judge’s favorable findings are not at issue on appeal. In responding to the SOR, Applicant denied that he failed to file his Federal tax returns as required. On appeal, he again makes that assertion, arguing he either filed on time or before six- month extensions expired. In the decision, the Judge found that Applicant filed his 2013 Federal income tax return on May 12, 2014 with no indication an extension was granted; that he filed his 2014 return in November 2015, which was about a month after a filing extension due date; that he filed his 2015 return on December 5, 2016, which was about two months after a filing extension due date; and that he filed his 2016 return on May 29, 2017, with no indication an extension was granted. In responding to interrogatories, Applicant submitted his IRS tax transcripts for each year in question. From our review of the IRS tax transcripts, we are unsure exactly when Applicant filed his tax returns. For example, his 2013 Federal tax transcript contains the following information: RETURN DUE DATE OR RETURN RECEIVED DATE (WHICHEVER IS LATER) Apr. 15, 2014 PROCESSING DATE May 12, 2014 TRANSACTIONS CODE EXPLANATION OF TRANSACTION CYCLE DATE AMOUNT Tax return filed 20141705 05-12-2014 $5,798.00 The first two lines quoted above reflect that Applicant filed his tax return on or before April 15, 2014, which would have been an on-time filing, and the IRS processed the return on May 12, 2014. On the other hand, the bottom-quoted line apparently reflects that the return was filed on 5-12-2014, which would have about a month late absent the filing for an automatic extension. The Judge did not address this apparent conflict about the filing date in the decision. Each of Applicant’s tax transcripts for the years in question contains a similar conflict.1 We note that the IRS Master File 1 Viewing the tax transcripts in a light most favorable to Applicant, his 2014 and 2015 tax transcripts still reflect that he filed those tax returns four days and two days after approved automatic extension due dates. Such minor filing deficiencies, however, do not raise security concerns. Codes2 indicate that Transaction Code 150 is for “Return Filed & Tax Liability Assessed,” which appears to involve the processing of the return to assess the tax owed and might explain why an amount is reflected on that transaction line and why the Transaction Code 150 date would also match the processing date for a routine individual tax return. This observation in not a finding of fact and is not binding on the Administrative Judge. A Judge’s task is to resolve apparent conflicts in the evidence. See, e.g., ISCR Case No. 14- 00281 at 4 (App. Bd. Dec. 30, 2014). In light of Applicant’s SOR response denying the alleged tax filing deficiencies, we conclude the Judge erred in failing to address in his decision the contradiction in the IRS tax transcripts about the filing dates and then explain how he was resolving those conflicts. Given that Applicant’s remaining delinquent debts total about $2,500, we cannot conclude a possible error in finding against Applicant on the tax filing deficiencies was harmless.3 Accordingly, we remand the case for the Judge to reopen the record to provide the parties an opportunity to present evidence and address the apparent conflict in the tax transcripts about tax return filing dates and to issue a new decision in accordance with the Directive. 2 https://www.irs.gov/pub/irs-utl/6209-section-8a-2012.pdf 3 In his appeal brief, Applicant also contends that he paid his Federal tax debt before the Judge issued the decision, but there is no evidence in the record to support that claim.

ORDER

The Decision is REMANDED. Signed: Michael Ra’anan Michael Ra’anan Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board