Summary
A 45-year-old single woman, an information technology professional, was denied a public trust position due to financial considerations under Guideline F. The applicant faced allegations of failing to file or pay federal and state income taxes between 2009 and 2013. This resulted in a federal lien of $214,039 and approximately $15,000 in delinquent state taxes for tax years 2009 through 2014.
On August 14, 2017, the applicant filed for Chapter 13 bankruptcy, and on September 12, 2018, the court discharged all debt for tax years 2009 through 2013. The IRS rejected a proposed Offer in Compromise. Subsequently, the applicant entered an installment agreement with the IRS to pay a remaining 2014 income tax balance of $26,868.
The applicant admitted to the allegations and demonstrated mitigation by timely filing taxes since 2015 and establishing a payment plan for remaining debts. However, the judge concluded that the applicant had not sufficiently mitigated the serious, multi-year financial concerns, leading to the denial of eligibility.
Why the Applicant Was Denied
- The applicant's failure to file income tax returns was serious and occurred over multiple years.
- The applicant's financial issues were exacerbated by personal circumstances, but the judge found insufficient evidence of complete resolution of trustworthiness concerns.
Conditions Referenced
- AG ¶ 19(a)raisedInability to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Annual Federal State, or Local Income Tax Returns or Failure to Pay Annual Federal State, or Local Income Taxes, as Required
- AG ¶ 20(b)appliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
- AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem From a Legitimate and Credible Source
- AG ¶ 20(d)appliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
- 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 Arrangements
Key Rule Quoted
“Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified [or sensitive] information.”
Procedural Posture
- SOR issuedDec 4, 2017
- Answer filedDec 22, 2017
- Hearing heldOct 31, 2018
- Decision dateMar 5, 2019
Cite For
- Mitigation of Financial Concerns Under Guideline F
- Impact of Personal Circumstances on Financial Obligations
- Consideration of Timely Tax Filings as a Mitigating Factor