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ISCR 23-02653: Guideline F security clearance appeal, denied (2025) · CASE

ISCR Case 23-02653denied

Case headnote

ISCR Case No. 23-02653

Apr 30, 2025· Hon. Moira D. Modzelewski· appeal

Summary

A security clearance applicant, representing herself, was denied under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant had five delinquent consumer debts totaling approximately $15,000 and a federal tax balance of about $9,600.

The applicant admitted to these allegations but failed to resolve two significant debts. A contributing factor to the adverse decision was the applicant's history of over-claiming tax exemptions. The appeal board upheld the denial, emphasizing the applicant's history of over-claiming tax exemptions and the lack of resolution for significant debts as critical factors. The outcome was a denial of the security clearance.

Conditions referenced

Disqualifying

AG ¶ 20raisedFinancial Considerations

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 issuedMar 18, 2024
Answer filed—
Hearing heldJan 31, 2025
Decision dateApr 30, 2025Appeal decision

Cite for

Financial Considerations Under Guideline F
Impact of Unresolved Debts on Security Clearance
Over-claiming Tax Exemptions as a Disqualifying Factor

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 involved a denial of security clearance based on financial considerations, specifically delinquent debts and federal tax issues. The applicant challenged the adverse findings related to two specific debts and the amount of federal tax owed. The Board affirmed the Administrative Judge's decision, finding no harmful error in the Judge's conclusions regarding the applicant's financial situation.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowRichard A. Cefola denied the clearance (split findings)

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 improperly weighed the evidence regarding her delinquent debts.
Judge mis-weighed or ignored evidence, raised by the applicantRejected
Applicant contended that the Judge's finding of her federal tax balance was incorrect.

Error found, but harmless. The Board agreed the judge made a mistake but affirmed anyway, because it did not change the outcome.

Why the Board ruled this way

The Board found that the Judge's conclusions were supported by substantial evidence and were not arbitrary or capricious. The adverse findings regarding the applicant's financial situation were upheld as sustainable based on the evidence presented.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appealDeference to the judge’s credibility calls

Appeal Board panel

Moira Modzelewski (Chair)
Jennifer I. Goldstein
Allison Marie

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 the matter of: )

)

----- )

ISCR Case No. 23-02653

)

) Applicant for Security Clearance ) _______________________________________)

DEPARTMENT OF DEFENSE DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS APPEAL BOARD POST OFFICE BOX 3656 ARLINGTON, VIRGINIA 22203 (703) 696-4759 Date: April 30, 2025

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT Andrea M. Corrales, Esq., Deputy Chief Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On March 18, 2024, DoD issued a Statement of Reasons (SOR) advising Applicant of the basis of that decision – security concerns raised under Guideline F (Financial Considerations) of the National Security Adjudicative Guidelines (AG) in Appendix A of Security Executive Agent Directive 4 (effective June 8, 2017) and DoD Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). On January 31, 2025, Defense Office of Hearings and Appeals Administrative Judge Richard A. Cefola denied Applicant national security eligibility. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30.

DISCUSSION

The SOR alleged that Applicant carried five delinquent consumer debts totaling approximately $15,000 and a delinquent federal tax balance of approximately $9,600 for tax years 2013, 2015, 2016, 2018, and 2019. Applicant admitted all allegations with explanation.

Regarding the consumer accounts, the Judge found that Applicant had paid the two smaller debts in-full and was addressing a third through monthly payments (SOR ¶ 1.b), and he resolved those accounts in her favor. Noting that Applicant had made no payments on the other two consumer debts (SOR ¶¶ 1.a and 1.c) since quitting her job in 2022, the Judge resolved those allegations adversely. On appeal, Applicant challenges the adverse findings for SOR ¶¶ 1.a and 1.con the basis that the accounts were turned over to the debt resolution attorney who is addressing SOR ¶ 1.b. She testified to the same at hearing and explained that the attorney had reached a settlement on SOR ¶ 1.bfor which Applicant was making monthly payments. She further testified, however, that SOR ¶ 1.bwas “the only one that had agreed for a settlement” and the attorney was not actively addressing SOR ¶¶ 1.a and 1.cas of the hearing. Tr. at 31-32. This limited payment progress is further reflected in the documentary evidence, and the Judge’s conclusion that SOR ¶¶ 1.a and 1.c remain unpaid is sustainable. Turning to the federal tax debt, the Judge found that Applicant had reduced the balance to about $4,200. Because the debt resulted from Applicant claiming seven tax exemptions when she was entitled to no more than three, the Judge “[could not] ignore Applicant’s fraudulent tax filings going back over ten years ago, covering a period of seven years” and resolved the federal tax debt adversely. Decision at 5. Applicant challenges the Judge’s finding that her federal tax balance was about $4,200, arguing instead that it is reduced to $2,300. The Judge’s finding was based on Applicant’s September 2024 Internal Revenue Service (IRS) online account statement, which reflects a balance of about $4,200 owed for tax years 2015, 2016, and 2018. Applicant Exhibit 1 at 10-11.1 Applicant points to no evidence in the record to support her claimed $2,300 federal balance. Our review of the record, however, reveals that Applicant’s post-hearing evidence – a screenshot seemingly from her IRS account – reflected a balance of about $3,600 as of about October 2024. Post-Hearing Exhibit 1 at 9-10. The evidence does not explain this additional $600 reduction. Even assuming most favorably that it resulted from Applicant’s direct payment, the Judge’s erroneous finding was harmless. See ISCR Case No. 00-0250 at 4 (App. Bd. Jul. 11, 2001). The Judge’s adverse conclusion was based in significant part on the reason underlying Applicant’s tax balance – i.e., her years of over-claiming exemptions – and we do not believe an additional $600 balance reduction would likely have resulted in a different outcome.

CONCLUSION

Applicant has not established that the Judge’s conclusions were arbitrary, capricious, or contrary to law. In the instant case, the Judge examined the relevant evidence, weighed the disqualifying and mitigating evidence, and articulated a satisfactory explanation for the decision. The record is sufficient to support that the Judge’s findings and conclusions are sustainable. “The 1 It bears noting that the IRS statement specifically does not reference tax year 2013, for which Applicant previously owed about $3,200 but believed the IRS would “write off” due to age. See Government Exhibit 4 at 1; Tr. at 22. Accordingly, the evidence does not support that Applicant actually resolved the 2013 balance but, rather, that she did not pay it and it simply aged off her account statement. The favorable credit afforded by the Judge to Applicant’s tax balance reduction appears undue; however, any such error inured to Applicant’s benefit and is therefore harmless.

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). “Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” AG ¶ 2(b).

ORDER

The decision in ISCR Case No. 23-02653 is AFFIRMED. Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Chair, Appeal Board Signed: Jennifer I. Goldstein Jennifer I. Goldstein Administrative Judge Member, Appeal Board Signed: Allison Marie Allison Marie Administrative Judge Member, Appeal Board