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ISCR 14-00857.a1: Guideline F security clearance appeal, denied (2015) · CASE

ISCR Case 14-00857.a1denied

Case headnote

ISCR Case No. 14-00857.a1

Apr 7, 2015· Hon. Jeffrey D. Billett· appeal

Summary

A former Army service member was denied a security clearance under Guideline F (Financial Considerations) primarily due to a failure to file federal income tax returns for the years 2006 through 2009. The applicant had been aware of these tax obligations since 2011 but did not file the returns until 2014.

The applicant's claims of being exempt from filing were not substantiated with evidence, and no satisfactory explanation was provided for the significant delay in compliance. While some mitigating conditions were considered, the judge found that the applicant's actions raised national security concerns due to the lack of timely adherence to tax responsibilities.

The appeal board affirmed the denial, underscoring the critical importance of tax compliance for individuals seeking security clearance eligibility. The decision highlighted the applicant's unsubstantiated claims and the prolonged non-compliance as key factors in the denial.

Conditions referenced

Disqualifying

AG ¶ 20raisedFailure to File Tax Returns

Mitigating

AG ¶ 23(a)rejectedThe Individual Has a History of Financial ResponsibilityThe applicant's late filing of tax returns did not demonstrate a consistent pattern of financial responsibility.
AG ¶ 23(c)rejectedThe Individual Has Taken Significant Steps to Address Financial ProblemsThe applicant's actions were insufficient to mitigate the security concerns raised.

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 issuedMay 1, 2014
Answer filed—Applicant represented himself pro se.
Hearing held—Decision made on the written record.
Decision dateApr 7, 2015

Cite for

Importance of Timely Compliance with Tax Obligations Under Guideline F
Impact of Financial Considerations on Security Clearance Eligibility
The Standard for Granting Clearance Consistent with National Security Interests

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 a security clearance based on financial considerations under Guideline F. The Applicant argued that the Judge made errors in her findings and that the decision was arbitrary and capricious. The Board affirmed the Judge's decision, finding it sustainable based on the record.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowCarol G. Ricciardello denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Judge mis-weighed or ignored evidence, raised by the applicantRejected
Applicant argued that the Judge erred in her findings regarding the summary of his interview.
Decision arbitrary, capricious, or contrary to law, raised by the applicantRejected
Applicant contended that the Judge's adverse decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge's conclusions regarding Applicant’s failure to file taxes were sustainable based on the record before her. The Judge's findings were supported by substantial evidence and did not constitute harmful error.

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

Michael Ra’anan (Chair)
Jeffrey D. Billett
James E. Moody

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 DIGEST: The Judge’s conclusions regarding Applicant’s failure to file taxeswere sustainable based on the record before her. Adverse decision affirmed. CASENO: 14-00857.a1 DATE: 04/07/2015 DATE: April 7, 2015 In Re: ------ Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 14-00857

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 May 1, 2014, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a decision on the written record. On January 22, 2015, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Carol G. Ricciardello denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issues on appeal: whether the Judge’s findings of fact contained errors and whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Finding of Fact Applicant served in the Army from 1978 to 1998. After retiring he worked for Federal contractors overseas and for his current employer since 2009. He has held a security clearance since 1999. Applicant divorced his first wife in 1981. He remarried in 1984 but separated from his second wife in 2006. Applicant did not file Federal income tax returns for tax years 2006 through 2009. In November 2013, he submitted to a clearance interview. He stated that he had thought he was exempt from filing because his income was below the taxable amount for persons working overseas. However, the threshold amount for filing was $18,700 for 2009 and lesser amounts for previous years. He provided no documents to the effect that his gross income was below these amounts. He provided a 2009 tax return showing a gross income of $63,406. Applicant told the interviewer that he received a letter in 2011 from the IRS inquiring about why he did not have Federal taxes withheld from his pay. He stated that he showed the IRS a form exempting him from withholding. The Judge stated that Applicant’s interview, as amended during his answer to DOHA interrogatories, was confusing. She found that it was not consistent with the interviewer’s summary of Applicant’s answers in significant ways. Applicant filed his 2009 tax return in August 2013 and his 2012 return the following November. IRS transcripts show that Applicant filed his 2006 and 2007 returns in October 2014, his 2008 return in July 2014, and his 2009 return in June 2014. “After 2011, Applicant was on notice that he was required to file federal income tax returns for prior tax years. He provided no explanation why he failed to do so until 2014.” Decision at 3. The Judge’s Analysis The Judge noted that Applicant has worked for Federal contractors overseas since 1998 yet he did not file his 2006 through 2009 tax returns until 2014. She cited to his statement that he did not believe he had to file due to not meeting the income threshold. She noted, however, that he had provided no explanation as to why he presumably had filed for prior years. Despite evidence that Applicant had been on notice since 2011 of his tax obligations, he did not file for the years in question until 2014 and offered no explanation for this delay. She stated that, despite some evidence in mitigation regarding his having finally filed his taxes, Applicant had failed to meet his burden of persuasion.

DISCUSSION

Applicant’s brief provides some explanation and context for the interview summary. He argues that the Judge erred in her findings regarding this summary. Among other things, he states that the Judge found that he did not start filing his delinquent tax returns until he had been placed on notice by the IRS in 2011 of his obligation to file. He stated that, to the contrary, in 2011 the IRS had inquired about withholding, not filing. We have examined Applicant’s brief in light of the record as a whole. The Judge found that Applicant had been placed on notice of his obligation to file as early as 2011 yet did not comply until nearly three years later and provided no satisfactory explanation for this delay. This is a reasonable interpretation of the record that was before her. Even if she erred as to the precise nature of the IRS communication that placed Applicant on notice, it did not affect her overall decision. The Judge’s material findings of security concern are supported by substantial record evidence or constitute reasonable inferences that could be drawn from the evidence. See, e.g., ISCR Case No. 14-00398 at 3 (App. Bd. Feb. 10, 2015). See ISCR Case No. 13-00375 at 2 (App. Bd. Mar. 28, 2014) for definition of “substantial evidence.” The Judge examined the relevant data 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, Enclosure 2 ¶ 2(b): “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.”

ORDER

The Decision is AFFIRMED. Signed: Michael Ra’anan Michael Ra’anan Administrative Judge Chairperson, Appeal Board Signed: Jeffrey D. Billett Jeffrey D. Billett Administrative Judge Member, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board