Summary
A 64-year-old accountant was denied a security clearance under Guideline F (Financial Considerations) due to a pattern of unfiled tax returns and significant delinquent debts. The Statement of Reasons detailed her failure to file federal income tax returns for multiple years, including 1989, 1991, 1992, 1995, 1996, 2005, 2006, 2009 through 2012, and 2014 and 2015. She also failed to file state income tax returns for 1989, 1991 through 1996, 2003, 2005, 2006, and 2008 through 2012.
Additionally, the applicant owed the federal government $69,849 for delinquent taxes from 2011 and $5,225 from 2012. She also had 14 delinquent consumer debts totaling $105,093. Disqualifying conditions under Guideline F were raised, including AG ¶ 19(a), AG ¶ 19(b), AG ¶ 19(c), and AG ¶ 19(f).
While some mitigating conditions (AG ¶ 20(c), AG ¶ 20(d), AG ¶ 20(g)) were considered, the judge found them insufficient. The denial was based on the applicant's long-standing failure to file tax returns, the persistent nature of her financial issues, and a lack of sufficient evidence demonstrating that her financial problems, particularly tax filings, were resolved or under control.
Why the Applicant Was Denied
- The applicant failed to file federal and state income tax returns for multiple years, raising significant concerns about her reliability and judgment.
- The applicant's financial issues persisted over many years, indicating a pattern of non-compliance with tax obligations and financial responsibilities.
- The applicant did not provide sufficient evidence to demonstrate that her financial problems were resolved or under control, particularly regarding her tax filings.
Conditions Referenced
- AG ¶ 19(a)raisedInability to Satisfy Debts
- AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 19(f)raisedFailure to File Annual Federal, State, or Local Income Tax Returns or Failure to Pay Annual Federal, State, or Local Income Tax as Required
- AG ¶ 20(c)rejectedThe Individual Has Received or Is Receiving Financial Counseling for the Problem From a Legitimate and Credible SourceThe applicant completed financial counseling only the day before the hearing, which did not demonstrate a meaningful effort to address her financial issues.
- AG ¶ 20(d)appliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant made regular payments on certain debts prior to the SOR issuance.
- AG ¶ 20(g)appliedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed and Is in Compliance with Those ArrangementsThe applicant was under IRS payment plans for some tax years, demonstrating good faith efforts to address her tax debts.
Key Rule Quoted
“Failure to file tax returns suggests that an applicant has a problem complying with well-established governmental rules and systems.”
Procedural Posture
- SOR issuedJan 12, 2018
- Answer filedFeb 7, 2018
- Hearing heldSep 27, 2018mutually agreed date
- Decision dateDec 9, 2019
Cite For
- Denial Based on Failure to File Tax Returns Under Guideline F
- Evaluation of Financial Reliability and Judgment in Security Clearance Cases
- Impact of Long-term Financial Issues on Security Clearance Eligibility