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ISCR Case 20-03027 — CASE

ISCR Case 20-03027denied

Case Headnote

ISCR Case No. 20-03027

Dec 14, 2022· Hon. Moira D. Modzelewski· appeal

Summary

A medically retired military member in her late forties was denied a security clearance under Guideline F (Financial Considerations). The denial stemmed from her failure to file federal income tax returns for the years 2013 through 2017.

The applicant cited medical issues and financial difficulties as reasons for her non-compliance. However, the appeal board upheld the denial, noting that the applicant did not demonstrate responsible actions regarding her tax obligations. This was particularly emphasized given that she had received a substantial inheritance, which could have been used to address her financial and tax responsibilities.

The board underscored the importance of timely tax compliance, concluding that the applicant's actions presented a disqualifying condition under F.1. The security clearance was therefore denied.

Conditions Referenced

Disqualifying

F.1raisedFailure to File or Pay Taxes

Key Rule Quoted

“The general standard is that a clearance may be granted only when ‘clearly consistent with the interests of the national security.’”
— Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural Posture

SOR issuedFeb 5, 2021
Answer filed—
Hearing heldSep 29, 2022
Decision dateDec 14, 2022

Cite For

Importance of Timely Tax Compliance in Security Clearance Evaluations
Impact of Financial Considerations on Security Clearance Decisions
Responsibility in Managing Inherited Funds Related to Tax Obligations

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

Affirmed

The appeal was filed by the Applicant after the denial of her security clearance based on financial considerations. The Applicant argued that the Judge's decision was based on incorrect information and that her medical issues were not adequately considered. The Board affirmed the Judge's decision, finding no harmful error in the proceedings.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowRobert E. Coacher — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence — raised by the applicantRejected
Applicant argued that the Judge did not give appropriate weight to her medical issues and earlier efforts to resolve the tax situation.
Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant contended that the Judge made his determination without having all the facts.

Why the Board ruled this way

The Board found that the Judge examined the relevant evidence and articulated a satisfactory explanation for the decision, which was sustainable on the record. The Applicant failed to establish any harmful error in the Judge's decision.

Standard of review applied

No de-novo re-decisionNo new evidence on appealSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural compliance

Appeal Board panel

James F. Duffy — Chair
Jennifer I. Goldstein
Moira Modzelewski

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

APPEARANCES

) In Re: )

) ----- ) ISCR Case No. 20-03027 ) ) Applicant for Security Clearance ) )

DATE: December 14, 2022

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 February 5, 2021, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision—a security concern raised under Guideline F (Financial Considerations) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On September 29, 2022, after close of the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Robert E. Coacher denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issue on appeal: whether the Judge’s adverse decision was based on incorrect information. Consistent with the following, we affirm.

The Judge’s Findings of Fact and Analysis Applicant is in her late forties and married, with no children. She was medically retired from the U.S. military in 2016 and is a prospective employee of a defense contractor. The SOR alleged that Applicant failed to timely file her 2013–2017 federal income tax returns, and Applicant admitted the sole allegation. In 2016 or 2017, Applicant received a lump-sum inheritance of approximately $197,000, but she did not use the funds to hire a tax professional to prepare her unfiled federal returns. She claimed to interview several accountants but asserted that she could not afford their fees. Applicant used the inherited funds instead to cover bills that were in arrears, medical costs, and living expenses. The inheritance is now depleted. After the SOR was issued in February 2021, Applicant hired a tax attorney to file all of her federal returns from 2013–2020. In November 2021, she filed her 2014–2016 tax returns. In August 2022, Applicant filed her 2013 and 2017 tax returns. Applicant testified that her medical issues impacted her ability to complete her taxes. She needed help to file her federal tax returns and did not receive it. Applicant provided character letters from colleagues and former supervisors, including retired general officers. They attest to her trustworthiness and reliability and recommend that her clearance be continued. Applicant provided numerous reasons why she was unable to file for tax years 2013 through 2017 in a timely manner, to include: reserve duties, mobilization orders, long working hours, lack of access to her financial documents, medical issues leading to her medical retirement, and a period of homelessness. While several circumstances were beyond Applicant’s control, some of them were not. She chose not to hire a professional to assist her when she received her inheritance of almost $200,000 in 2016 or 2017. She finally acted to hire a tax professional in 2021 who filed her missing returns . . . after the SOR had issued. Applicant’s actions do not amount to responsible actions under the circumstances. While it appears Applicant’s missing 2013–2017 tax returns are all filed, they are all at least four years late and as much as eight years late. [Decision at 6.]

DISCUSSION

In her appeal brief, Applicant asserts that the Judge made his determination “without actually having all the facts at his fingertips” and provides additional information about the circumstances that led to her financial issues. Appeal Brief at 1–2. The Appeal Board does not review cases de novo and is prohibited from considering new evidence on appeal. Directive E3.1.29. Applicant also argues that the Judge did not give appropriate weight to her medical issues and her earlier efforts to resolve the tax situation. The Judge, however, discussed the matters that Applicant is raising on appeal. Her arguments are neither sufficient to rebut the presumption that the Judge

considered all of the evidence in the record nor enough to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., ISCR Case No. 19-01400 at 2 (App. Bd. Jun. 3, 2020). In his whole-person analysis, the Judge complied with the requirements of the Directive by considering the totality of the evidence in reaching his decision. An ability to argue for an alternative interpretation of the evidence is not sufficient to demonstrate error. See, e.g., ISCR Case No. 10-07127 at 3 (App. Bd. Dec. 19, 2012). Applicant has failed to establish that the Judge committed any harmful error. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. The decision is sustainable on this record. “The general standard is that a clearance may be granted only when ‘clearly consistent with the interests of the national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). See also Directive, Encl. 2, App. A ¶ 2(b): “Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”

ORDER

The Decision is AFFIRMED. Signed: James F. Duffy James F. Duffy Administrative Judge Chairperson, Appeal Board Signed: Jennifer I. Goldstein Jennifer I. Goldstein Administrative Judge Member, Appeal Board Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board