Summary
A 57-year-old federal contracting LLC owner was denied a security clearance under Guideline F (Financial Considerations) due to significant unresolved financial issues. The Statement of Reasons detailed several allegations, including an $84,749 charged-off mortgage loan, a home foreclosure in 2018, and a $1,015 past-due credit card balance. Additionally, the applicant had three outstanding state tax liens totaling over $105,000.
The primary concern, however, involved substantial federal income tax debt. The applicant owed over $315,000 in outstanding federal income taxes, including a lien for $145,920. Specific federal tax liabilities included $29,910 for the 2016 tax year and $88,087 for the 2017 tax year.
Despite resolving some debts and demonstrating efforts toward tax compliance since 2018, the judge found insufficient evidence of consistent tax compliance and repayment efforts for the over $169,000 in unpaid federal income taxes. The denial was based on concerns about reliability and trustworthiness, exacerbated by poor financial choices and a difficult marriage, which led to the multiple tax liabilities.
Why the applicant was denied
- The applicant has over $169,000 in unpaid federal income taxes, which raises concerns about reliability and trustworthiness.
- The applicant's financial issues were exacerbated by poor financial choices and a difficult marriage, leading to multiple tax liabilities.
- The applicant has not demonstrated a sufficient history of tax compliance or repayment of outstanding federal tax debt.
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 File Annual Federal, State, or Local Income Tax Returns or Failure to Pay Annual Federal, State, or Local Income Tax as Required
- AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problems Were Largely Beyond the Person's ControlWhile the applicant's marriage dissolution contributed to financial issues, poor financial choices were also a factor.
- AG ¶ 20(c)notedReceived or Is Receiving Financial Counseling
- AG ¶ 20(d)appliedInitiated and Is Adhering to a Good-faith Effort to Repay Overdue CreditorsThe applicant has made efforts to resolve some debts and has been compliant with tax obligations since 2018.
- AG ¶ 20(g)appliedMade Arrangements with the Appropriate Tax Authority to File or Pay the Amount OwedThe applicant is awaiting assignment of his case to a revenue officer to negotiate a collection alternative.
Key rule quoted
“The protection of the national security is the paramount consideration.”
Procedural posture
- SOR issuedJun 9, 2020
- Answer filed—
- Hearing heldMay 19, 2021
- Decision dateSep 9, 2021
Cite for
- Denial of Security Clearance Due to Unresolved Financial Obligations Under Guideline F
- Insufficient Evidence of Tax Compliance and Repayment Efforts
- Impact of Personal Circumstances on Financial Management and Security Clearance Eligibility