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ISCR Case 16-00569.a1 — CASE

ISCR Case 16-00569.a1denied

Case Headnote

ISCR Case No. 16-00569.a1

Jan 16, 2018· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant, representing himself, was denied a security clearance under Guideline F (Financial Considerations) due to unresolved tax debts, including a significant Federal tax delinquency. The appeal board affirmed this denial, citing the applicant's failure to provide sufficient evidence of the Federal tax debt's resolution.

The board applied Disqualifying Condition AG ¶ 19, which addresses financial irresponsibility. While Mitigating Conditions AG ¶ 20(a) and AG ¶ 20(c) were considered, the applicant did not substantiate his claims of mitigating circumstances with adequate documentation.

Ultimately, the denial was based on the lack of demonstrated resolution for the Federal tax delinquency and insufficient evidence to support any mitigating factors. The board emphasized the paramount importance of national security in all clearance determinations.

Conditions Referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20(a)rejectedThe Behavior Was Not Recent.The applicant's financial issues were ongoing and unresolved.
AG ¶ 20(c)rejectedThe Individual Has Received Counseling for the Problem.The applicant did not provide sufficient evidence of financial counseling's effectiveness.

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 issuedJun 8, 2016
Answer filed—
Hearing heldOct 12, 2017
Decision dateJan 16, 2018

Cite For

Affirmation of Denial Based on Unresolved Tax Debts Under Guideline F
Insufficient Evidence of Financial Resolution as a Basis for Clearance Denial
Importance of National Security Considerations in Clearance Determinations

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's decision was arbitrary and capricious. The Board affirmed the decision, finding no harmful error in the Judge's analysis.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowShari Dam — denied the clearance

Decided onthe written record

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge's adverse decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found no harmful error in the Judge's decision and affirmed the denial of the security clearance. The Judge's analysis was deemed reasonable and supported by substantial evidence.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewNo 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 DIGEST: Applicant has submitted a document showing that he has paid his taxes for the tax year ending December 31, 2015. This is new evidence, which we cannot consider. Also, this document has no bearing upon his 2005 tax delinquency. He cites to two mitigating conditions. After examining the record as a whole we find no reason to undermine the Judge’s analysis. Disagreement with a Judge’s weighing of the evidence is not enough to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. Applicant states that he has not had a job since he lost his clearance. We are not permitted to consider the impact of an adverse decision. Adverse decision affirmed. CASENO: 16-00569.a1 DATE: 01/16/2018 DATE: January 16, 2018 In Re: -----------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 16-00569

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 June 8, 2016, 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 October 12, 2017, after considering the record, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Shari Dam 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 arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant has been steadily employed since 2002, except for a period of unemployment from 2009 to 2010. He has held a clearance for many years. His SOR alleges debts to his state taxing authority and to the IRS. The Federal delinquency, including penalties, was about $52,000 as of the date of Applicant’s clearance interview. Applicant resolved his tax debt to his state. However, the Judge found that he has not demonstrated resolution of the debt to the Federal Government. Although he claimed that his debt to the IRS had been reduced to about $15,000 through a payment arrangement, he provided no documentary corroboration. He hired a lawyer to dispute his tax debts. Applicant purchased two rental properties, but his tenants did not pay their rent. In 2005, he withdrew funds from his equity accounts for repairs and expenses. The properties were eventually sold through foreclosure, and the equity transactions were considered income that Applicant had not reported. Applicant stated that this tax debt was assessed during his period of unemployment. One of Applicant’s exhibits is a letter from the IRS stating that he owed about $5,000 for tax year 2011. It made no reference to his 2005 tax obligation that is the subject of this case. Applicant provided no budget or other information about his ability to resolve his debts, although he did take a financial counseling course through his church. The Judge’s Analysis The Judge resolved the allegation about Applicant’s state tax debt in his favor. However, she entered adverse findings regarding his 2005 Federal tax delinquency. She stated that he had not provided evidence from the IRS setting forth a payment plan, nor did he present evidence of a basis to dispute his debt. The Judge cited to evidence of Applicant’s period of unemployment and to his problems with his tenants. She found that he had not submitted sufficient information about his Federal tax debt to show that it is being resolved.

DISCUSSION

Applicant has submitted a document showing that he has paid his Federal taxes for the tax year ending December 31, 2015. This is new evidence, which we cannot consider. Directive ¶ E3.1.29. In any event, this document has no bearing upon Applicant’s 2005 tax delinquency. Applicant cites to two mitigating conditions. However, after examining the record as a whole we find no reason to undermine the Judge’s analysis. Disagreement with a Judge’s weighing of the evidence is not enough to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See, e.g., 15-07062 at 2 (App. Bd. Nov. 21, 2017). Applicant states that he has not had a job since he lost his clearance. We are not permitted to consider the impact of an adverse decision. See, e.g., ISCR Case No. 16-01787 at 2 (App. Bd. Nov. 22, 2017). 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: 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