Summary
A 47-year-old federal contractor was denied a security clearance due to significant financial concerns under Guideline F. The Statement of Reasons detailed a 2005 Chapter 7 bankruptcy discharged in 2006, and a failure to file Federal and state income tax returns for at least tax years 2007 through 2016. This resulted in delinquent state taxes of $16,780 and delinquent Federal taxes of $43,717.
Further issues included seven collection accounts totaling approximately $5,245, a 2011 state tax lien for $7,975, and a 2009 Federal tax lien for $16,528. The applicant was also cited for failing to pay debts related to collection accounts, failing to maintain financial obligations, and failing to demonstrate financial responsibility.
Despite some recent payments towards debts, the judge found the applicant's financial situation was not under control, with substantial outstanding tax liabilities and an unproven payment plan. The applicant also failed to provide documentation for claimed debt payments or disputed collection accounts. Consequently, the security clearance was denied.
Why the Applicant Was Denied
- The applicant failed to file Federal and state income tax returns for multiple years without sufficient explanation.
- The applicant's financial situation was not under control, with significant outstanding tax liabilities and a recent payment plan that lacked a track record.
- The applicant did not provide documentation to support claims of having paid debts or disputed collection accounts.
Conditions Referenced
- AG ¶ 19(a)appliedInability to Satisfy Debts
- AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations
- AG ¶ 19(f)appliedFailure to File . . . Income Tax Returns as Required
- AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlThe applicant's attempts to work with tax negotiators were not deemed responsible due to lack of a durable payment plan.
- AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant's recent payment plan with the IRS was insufficient to demonstrate control over financial issues.
- AG ¶ 20(g)rejectedArrangements with Tax AuthorityThe applicant's payment plan was too recent to show that financial problems were under control.
Key Rule Quoted
“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”
Procedural Posture
- SOR issuedFeb 8, 2018
- Answer filedMar 8, 2018
- Hearing heldOct 18, 2018
- Decision dateJan 18, 2019
Cite For
- Insufficient Mitigation of Financial Issues Under Guideline F
- Impact of Failure to File Tax Returns on Security Clearance Eligibility
- Consideration of Recent Financial Actions in the Context of Overall Financial Responsibility