Summary
A 54-year-old pilot instructor was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial irresponsibility and non-compliance with tax obligations. The Statement of Reasons detailed several concerns, including two Chapter 7 bankruptcies, one filed in 2010 and discharged in 2011.
Further allegations included the applicant's failure to file federal income tax returns for tax years 2010 through 2016. The applicant also had delinquent state sales tax totaling approximately $2,000 and two delinquent real-estate timeshare debts exceeding $15,800.
Despite presenting some evidence of financial counseling and attempts to resolve debts, the judge found insufficient evidence of financial responsibility. The denial was based on the applicant's failure to file multiple years of federal income tax returns, the pattern of two Chapter 7 bankruptcies, and a lack of timely efforts to resolve financial delinquencies.
Why the Applicant Was Denied
- The applicant failed to file federal income tax returns for multiple years, demonstrating a lack of compliance with tax obligations.
- The applicant's history of two Chapter 7 bankruptcies indicated a pattern of financial irresponsibility.
- The applicant did not provide sufficient evidence of efforts to resolve financial delinquencies in a timely manner.
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 Tax as Required
- AG ¶ 20(a)rejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
- AG ¶ 20(b)rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
- AG ¶ 20(c)appliedThe Individual Has Received or Is Receiving Financial Counseling
- AG ¶ 20(d)rejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors
- AG ¶ 20(e)rejectedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due Debt
- AG ¶ 20(g)appliedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed
Key Rule Quoted
“Failure to comply with federal and state tax laws suggests that an applicant has a problem with abiding to well-established Government rules and regulations.”
Procedural Posture
- SOR issuedApr 24, 2018
- Answer filedMay 15, 2018
- Hearing heldJun 6, 2019Hearing was convened as scheduled.
- Decision dateOct 2, 2019
Cite For
- Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
- Failure to File Tax Returns as a Disqualifying Factor
- Insufficient Evidence of Financial Responsibility Despite Attempts at Mitigation.