Summary
A 64-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to a significant history of federal and state tax delinquencies. The Statement of Reasons detailed multiple failures to timely file federal tax returns for tax years 2012, 2014, 2015, and 2016.
The applicant also owed substantial amounts for unpaid federal taxes, including $94,497 for 2013, an account balance of $94,869 for 2014, and $72,733 for 2015. Additionally, he owed $53,224 for delinquent state taxes from 2012, 2013, 2014, and 2015. Several tax liens were cited, including $127,493 for 2010 and 2011, $149,654 for 2012 and 2013, and $58,935 for 2015.
Despite acknowledging his tax issues and taking some steps to address them, the administrative judge found the mitigation insufficient. The judge concluded that the applicant's long history of failing to file and pay taxes, coupled with his admission to multiple allegations without adequate mitigation, raised serious doubts about his judgment and reliability. Consequently, granting the clearance was deemed inconsistent with national interest.
Why the Applicant Was Denied
- The applicant had a long history of failing to file and pay federal and state income taxes.
- He admitted to multiple allegations of tax delinquency without providing sufficient mitigation.
- The judge concluded that his financial issues raised serious doubts about his judgment and reliability.
Conditions Referenced
- 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 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(c)rejectedThe Individual Has Received or Is Receiving Financial Counseling for the Problem From a Legitimate and Credible SourceThe applicant did not present evidence of participating in credit or financial counseling.
- AG ¶ 20(g)rejectedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed and Is in Compliance with Those ArrangementsThe agreements were too recent and the amount owed was significant.
Key Rule Quoted
“Failure to file tax returns suggests that an applicant has a problem with complying with well-established government rules and systems.”
Procedural Posture
- SOR issuedDec 21, 2018
- Answer filedJan 17, 2019
- Hearing heldNov 12, 2019as scheduled
- Decision dateJan 7, 2020
Cite For
- Denial of Security Clearance Due to Financial Considerations Under Guideline F
- Failure to Mitigate Tax Delinquencies as a Disqualifying Factor
- Importance of Compliance with Tax Obligations in Security Clearance Evaluations