Summary
The applicant, a 61-year-old employee of a federal contractor, faced security clearance denial primarily due to financial considerations, specifically failing to timely file federal and state income tax returns from 2012 to 2017 and failing to pay taxes. While foreign influence concerns related to his family ties in France were mitigated, his recent efforts to address tax issues were deemed insufficient to demonstrate financial responsibility, leading to the denial of his clearance.
Under Guideline B (Foreign Influence) and Guideline F (Financial Considerations), the Statement of Reasons alleged the following: His wife and three children are dual citizens of the United States and France (2.a). His in-laws are citizens and residents of France (2.b). He owns a home in France with an estimated value of $600,000, with a $200,000 mortgage (2.c). He anticipated receiving $1,000 a month from the French government upon his retirement at age 65 (2.d). He anticipated receiving a $600,000 lump sum from the Swiss government upon his retirement at age 65 (2.e). Failed to timely file federal income tax returns for tax years 2012 through 2017 (1.a). Failed to timely file state income tax returns for tax years 2011 through 2017 (1.b). Indebted to his state for an income tax lien issued in May 2017 for $9,481 (1.c). Unpaid $7,333 judgment filed against him by a bank in November 2017 (1.d).
The judge denied the clearance. The government raised disqualifying conditions AG ¶ 19(c), AG ¶ 19(f). The judge applied mitigating conditions AG ¶ 20(g). The decision turned on the following: Failed to timely file federal income tax returns for tax years 2012 through 2017; Failed to timely file state income tax returns for tax years 2011 through 2017; Failed to timely pay federal and state taxes, resulting in penalties and interest.
Why the Applicant Was Denied
- Failed to timely file federal income tax returns for tax years 2012 through 2017.
- Failed to timely file state income tax returns for tax years 2011 through 2017.
- Failed to timely pay federal and state taxes, resulting in penalties and interest.
Conditions Referenced
- 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(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 to file tax returns suggests that an applicant has a problem with complying with well-established governmental rules and systems.”
Procedural Posture
- SOR issuedSep 28, 2018
- Answer filedDec 6, 2018
- Hearing heldSep 19, 2019
- Decision dateJan 29, 2020
Cite For
- Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
- Mitigation of Foreign Influence Concerns Under Guideline B
- Importance of Timely Tax Compliance in Security Clearance Evaluations