ISCR Case 06-26266

Case Headnote

ISCR Case No. 06-26266

deniedDec 31, 2007· Hon. John Grattan Metz, Jr.· hearing

Summary

A 47-year-old instructional designer was denied a security clearance under Guideline E (Personal Conduct) and Guideline F (Financial Considerations) due to significant financial issues and a lack of candor. The applicant failed to file federal income tax returns for several years, resulting in substantial delinquent debt, and did not disclose these issues on her clearance application.

Specifically, the applicant did not file tax returns from 1999 through 2005, acknowledging she owed taxes but lacked funds to pay them. Her tax problems began in 1996 with a $9,369 IRS tax lien for unpaid taxes from 1991 and 1992. When she submitted her clearance application in July 2006, she answered "no" to questions about being delinquent on accounts, despite these outstanding debts. She later listed her tax lien and three other IRS debts in a February 2007 response to DOHA interrogatories.

The judge found that the applicant deliberately concealed the nature and extent of her tax debts and issues. Her failure to file returns, the ensuing delinquent debt, and her omission of this information on her application demonstrated a lack of judgment and responsibility. The applicant's financial difficulties were recent and multiple, and she did not responsibly address them, leading to the denial of her security clearance.

Why the Applicant Was Denied

The applicant failed to file federal income tax returns for multiple years, resulting in significant delinquent debt.
The applicant did not disclose her delinquent debt on her security clearance application, which was deemed a deliberate omission.
The applicant's financial difficulties were recent and multiple, and she did not act responsibly in addressing them.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns as Required
AG ¶ 16(a)raisedDeliberate Omission, Concealment, or Falsification of Relevant and Material Facts

Key Rule Quoted

“The government has a compelling interest in ensuring each Applicant possesses the requisite judgement, reliability, and trustworthiness of those who must protect national interests as their own.”
— Department of the Navy v. Egan, 484 U.S. 518 (1988)

Procedural Posture

SOR issuedAug 7, 2007
Answer filedAug 16, 2007
Hearing heldDec 10, 2007Applicant requested a continuance six days prior to the hearing, which was denied.
Decision dateDec 31, 2007

Cite For

Denial of Clearance Based on Failure to File Tax Returns Under Guideline F
Deliberate Omission of Financial Obligations Under Guideline E
Failure to Mitigate Financial Concerns Due to Lack of Responsible Action

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

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant deliberately concealed the nature and extent of her tax debts and issues.	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Financial	Denied	—	—	—
2.b–2.d	3 sub-charges — specific text not stated in this decision (2 against, 1 for the applicant). (low confidence)	Mixed		—		—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant deliberately concealed the nature and extent of her tax debts and issues.

Against Applicant

Omission or Failure to DiscloseFOUND DELIBERATE

Financial

Denied

—

2.b–2.d

3 sub-charges — specific text not stated in this decision (2 against, 1 for the applicant). (low confidence)

Mixed

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant’s failure to timely file her Federal income tax returns for several years, the ensuing delinquent debt, and her failure to disclose that debt on her clearance application render her an unsuitable candidate for a security clearance. $19,369	Against Applicant	Tax Filing Failure	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.b	Applicant’s problems with the Internal Revenue Service (IRS) began in 1996, when the IRS filed a $9,369 tax lien against her for unpaid taxes, penalties, and interest for tax years 1991 and 1992. $9,369	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.c	Applicant does not recall whether she filed her income tax returns for 1993 through 1998, but acknowledges that she did not file her income tax returns from 1999 through 2005 because she knew she owed taxes and did not have the money to pay them.	Against Applicant	Tax Filing Failure	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.d	When Applicant submitted her clearance application in July 2006, she answered “no” to two questions asking if she had been 180 days delinquent on any accounts within the last seven years, or was currently 90 days delinquent on any account.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—
1.e	In her February 2007 answer to DOHA interrogatories, Applicant listed her tax lien as well as three other debts to the IRS.	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant’s failure to timely file her Federal income tax returns for several years, the ensuing delinquent debt, and her failure to disclose that debt on her clearance application render her an unsuitable candidate for a security clearance.

$19,369

Against Applicant

Tax Filing Failure

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.b

Applicant’s problems with the Internal Revenue Service (IRS) began in 1996, when the IRS filed a $9,369 tax lien against her for unpaid taxes, penalties, and interest for tax years 1991 and 1992.

$9,369

Against Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.c

Applicant does not recall whether she filed her income tax returns for 1993 through 1998, but acknowledges that she did not file her income tax returns from 1999 through 2005 because she knew she owed taxes and did not have the money to pay them.

Against Applicant

Tax Filing Failure

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.d

When Applicant submitted her clearance application in July 2006, she answered “no” to two questions asking if she had been 180 days delinquent on any accounts within the last seven years, or was currently 90 days delinquent on any account.

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

1.e

In her February 2007 answer to DOHA interrogatories, Applicant listed her tax lien as well as three other debts to the IRS.

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

—

Loading case…

Case Profile

Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

CONCLUSION

FORMAL FINDINGS

DECISION