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ISCR Case 20-01629 — CASE

ISCR Case 20-01629denied

Case Headnote

ISCR Case No. 20-01629

Nov 8, 2021· Hon. Michael Y. Ra'anan· appeal

Summary

A defense contractor in his forties was denied a security clearance under Guideline F, Financial Considerations, due to a consistent failure to file tax returns between 2009 and 2018. This pattern of non-compliance raised concerns about the applicant's judgment and reliability.

Despite the applicant acknowledging some deficiencies and subsequently filing returns for certain years, the appeal board upheld the denial. The board found that the applicant's arguments did not demonstrate that the initial judge's decision was arbitrary or capricious.

The denial underscored the critical importance of fulfilling legal obligations, such as timely tax filing, for individuals seeking national security eligibility. The repeated failures to meet these responsibilities were deemed disqualifying under Guideline F.

Conditions Referenced

Disqualifying

F1raisedFailure to File Tax Returns as Required

Key Rule Quoted

“It is well established that a person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns as required, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information.”
— ISCR Case No. 15-08782 at 3 (App. Bd. Apr. 5, 2017)

Procedural Posture

SOR issuedOct 7, 2020
Answer filed—
Hearing heldAug 18, 2021
Decision dateNov 8, 2021

Cite For

Importance of Compliance with Tax Obligations Under Guideline F
Reaffirmation of the Standard for Security Clearance Eligibility
The Significance of Demonstrating Good Judgment and Reliability in Security Clearance Cases

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

Appeal at a glance· Full written decision

Affirmed

The appeal concerned the denial of a security clearance based on financial considerations, specifically the applicant's failure to file tax returns for multiple years. The applicant argued that the decision was arbitrary and capricious. The Board affirmed the decision, finding no harmful error in the Judge's analysis.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowLeRoy F. Foreman — denied the clearance

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
Applicant argued that the Judge's decision was arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge's decision was supported by substantial evidence and that the applicant failed to demonstrate that the Judge's weighing of the evidence was arbitrary or capricious.

Standard of review applied

Harmful-error gatekeeperSubstantial-evidence reviewArbitrary-and-capricious reviewProcedural complianceNo de-novo re-decisionNo new evidence on appealDeference to the judge’s credibility calls

Appeal Board panel

Michael Ra’anan — Chair
James E. Moody
James F. Duffy

Descriptive structured reading of this decided, public Appeal Board decision — what the case says, not a prediction or advice.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

APPEAL

APPEARANCES

[Extraction unavailable]

APPEAL BOARD DECISION

_______________________________________________ ) In the matter of: )

)

-------------------------- )

ISCR Case No. 20-01629

)

) Applicant for Security Clearance ) _______________________________________) DEPARTMENT OF DEFENSE DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS APPEAL BOARD POST OFFICE BOX 3656 ARLINGTON, VIRGINIA 22203 (703) 696-4759 KEYWORD: Guideline F DIGEST: Applicant asserts, that he self-disclosed his tax filing deficiencies, he has filed his tax returns for 2014 and 2018 and qualifies for tax refunds for those years, his credit report reflects zero late payments on his debts, and he lives within his means. He also notes that, due to COVID-19 shutdowns, his tax returns for 2014-2018 have not yet been processed. His arguments fail to establish that the Judge’s weighing of the evidence was arbitrary, capricious, or contrary to law. Directive ⁋ E3.1.32.3. It is well established that a person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns as required, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information. Adverse Decision is Affirmed. CASE NO: 20-01629.a1 DATE: 11/08/2021 Date: November 8, 2021

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT

Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On October 7, 2020, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision―security concerns raised under Guideline F (Financial Considerations) of DoD Directive 5220.6 (January 2, 1992, as amended) (Directive). Applicant requested a hearing. On August 18, 2021, after the hearing, Defense Office of Hearings and Appeals (DOHA) Administrative Judge LeRoy F. Foreman denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. Applicant raised the following issues on appeal: whether the decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact and Analysis Applicant is in his forties. He has been working for defense contractors for over 20 years and has held a security clearance during that employment. He is divorced with no children. The SOR alleged that Applicant failed to file, as required, his Federal and state income tax returns for 2009-2011 and 2015-2018. In responding to the SOR, Applicant admitted the tax filing deficiencies for 2015-2018 and denied the earlier ones. In a 2012 security clearance application (SCA), Applicant disclosed that he had not filed his Federal and state tax returns for 2009-2011. During a background interview, he attributed that failure to “not getting around to doing it.” Decision at 2, quoting from Government Exhibit (GE) 3 at 4. In a 2019 SCA, he disclosed that he had not filed his Federal and state income taxes for 2015-2017. During a background interview, he indicated he “is bad at filing his taxes on time” and “does not have the motivation to complete the paperwork in time.” Decision at 2, quoting from GE 3 at 2. At the hearing, Applicant noted that his more recent tax filing deficiencies began when he separated from his wife, he dreaded doing taxes, and the pending hearing motivated him to file his returns. He claimed that, in 2014, a tax professional prepared his Federal and state income tax returns for 2009-2011but provided no documentary evidence to show they were filed. As of October 19, 2020, his IRS tax transcripts reflect that he had not filed his Federal income tax returns for 2016-2018. In May 2021, Applicant completed his Federal and state income tax returns for 2014-2019. He was entitled to Federal tax refunds for each of those years. He did not provide documentation showing those returns were filed. A credit report reflects all of his debts are current. None of the Guideline F mitigating conditions were fully established. “Failure to file tax returns suggests an applicant has a problem with complying with well-established rules and systems.” Decision at 6. Applicant did not mitigate the security concerns arising from his failure to file his Federal and state tax returns in a timely manner. The Judge indicated that, even if Applicant had filed his tax returns for 2015-2018, such action would not have change his decision.

DISCUSSION

In his appeal brief, Applicant asserts, for example, that he self-disclosed his tax filing deficiencies, he has filed his tax returns for 2014 and 2018 and qualifies for tax refunds for those years, his credit report reflects zero late payments on his debts, and he lives within his means. He also notes that, due to COVID-19 shutdowns, his tax returns for 2014-2018 have not yet been processed. His arguments fail to establish that the Judge’s weighing of the evidence was arbitrary, capricious, or contrary to law. Directive ⁋ E3.1.32.3. It is well established that a person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns as required, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information. See, e.g., ISCR Case No. 15-08782 at 3 (App. Bd. Apr. 5, 2017). Applicant has failed to establish the Judge committed any harmful error. The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. The decision is sustainable on the record. “The general standard is that a clearance may be granted only when ‘clearly consistent with national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). See also, Directive, Encl. 2, App. A ¶ 2(b): “Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of national security.”

ORDER

The decision is AFFIRMED. Signed: Michael Ra’anan Michael Ra’anan Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: James F. Duffy James F. Duffy Administrative Judge Member, Appeal Board