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ISCR Case 20-00017 — CASE

ISCR Case 20-00017denied

Case Headnote

ISCR Case No. 20-00017

Oct 31, 2022· Hon. Moira D. Modzelewski· appeal

Summary

A defense contractor in his forties was denied a U.S. security clearance under Guideline F (Financial Considerations), primarily due to unfiled tax returns and delinquent debts. The applicant failed to file Federal and state income tax returns for tax years 2012 through 2018.

While the initial judge found in the applicant's favor regarding consumer debts, the adverse findings concerning the tax issues were upheld on appeal. The denial emphasized the applicant's lack of timely action and responsibility in addressing his tax obligations, despite being alerted to them.

The applicant's explanation for not filing taxes was deemed unconvincing given his age and experience. The decision highlighted Disqualifying Condition F.2.a, which addresses a history of not meeting financial obligations.

Conditions Referenced

Disqualifying

F.2.araisedFailure to File or Pay Taxes

Key Rule Quoted

“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)

Procedural Posture

SOR issuedApr 10, 2020
Answer filed—
Hearing heldJun 1, 2021
Decision dateOct 31, 2022Appeal decision

Cite For

Failure to File Tax Returns as a Disqualifying Condition Under Guideline F
The Importance of Timely Corrective Action in Financial Matters
The Standard for Granting Security Clearances in Relation to National Security Considerations

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 involved a denial of a security clearance based on financial considerations, specifically the failure to file tax returns and delinquent debts. The applicant argued that the Judge failed to consider all evidence and misapplied mitigating factors. The Board affirmed the Judge's decision, finding no harmful error in the proceedings.

Appealed bythe applicant

Applicant representationAttorney

Judge belowRobert Tuider — denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Decision arbitrary, capricious, or contrary to law — raised by the applicantRejected
The Judge failed to properly consider all available evidence, rendering his adverse decision arbitrary, capricious, or contrary to law.

Why the Board ruled this way

The Board found that the Judge properly considered the evidence and articulated a satisfactory explanation for the decision, which was sustainable on the record.

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

James F. Duffy — Chair
James E. Moody
Moira Modzelewski

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

_______________________________________________ ) In the matter of: )

)

----- )

ISCR Case No. 20-00017

)

) 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 Date: October 31, 2022

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT James B. Norman, Esq., Chief Department Counsel FOR APPLICANT Brittany D. Forrester, Esq. The Department of Defense (DoD) declined to grant Applicant a security clearance. On April 10, 2020, DoD issued a statement of reasons (SOR) advising Applicant of the basis of 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 17, 2022, after the record closed, Defense Office of Hearings and Appeals (DOHA) Administrative Judge Robert Tuider denied Applicant’s request for a security clearance. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30. The SOR alleged six financial concerns—a failure to file Federal income tax returns for tax years 2012 through 2018, a failure to file state income tax returns for the same period, and four delinquent consumer debts. The Judge found for Applicant on the four consumer debts and against Applicant on the Federal and state tax allegations. The favorable findings are not in issue. Applicant raises the following issue on appeal—whether the Judge failed to properly consider all available evidence, rendering his adverse decision 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 and married with two children. After serving on active duty in the U.S. military, he has worked as a defense contractor for the past 16 years. He has held a security clearance since the late 1990s. With his Answer to the SOR, Applicant attached his Federal and state tax returns for tax year (TY) 2018. At hearing, Applicant submitted his Federal and state returns for TY 2017. As of his hearing in June 2021, Applicant had not filed his Federal or state income tax returns for TYs 2012–2016. Post-hearing, Applicant submitted an agreement with a professional tax service, which he entered into after his hearing, and his recently completed state and Federal returns for TYs 2012– 2016. Additionally, Applicant documented two payments to the IRS in May 2021 that totaled about $10,000. During his October 2019 security clearance interview, Applicant stated that he was unsure of the amount owed for his Federal and state taxes, that the state had garnished his wages for delinquent taxes, and that he was in the process of contacting someone to assist him with his tax issues. Applicant was alerted to the fact that his failure to file these returns was a concern to the Government during his October 2019 [security clearance interview] and later when he received his April 2020 SOR. These events apparently did not prompt Applicant to recognize the seriousness of his situation and take immediate corrective action. He ultimately filed his Federal and state income tax returns; however, he did not begin to do so until the eve of his hearing and five of his returns were not filed until after his hearing. His explanation of being scared to file his returns and concerned about the amount he would owe is not a convincing explanation for an individual of his age and experience. . . . The evidence demonstrates that Applicant did not act responsibly with regard to timely filing his Federal income tax returns and paying or making payment arrangements for taxes owed. [Decision at 9.]

DISCUSSION

Applicant has not challenged any of the Judge’s specific findings of fact. Rather, he contends the Judge erred in failing to comply with the provisions in Executive Order 10865 and the Directive by not considering all of the evidence, by mis-weighing the evidence, and by not properly applying the mitigating conditions and whole-person concept. First, Applicant argues that the Judge “failed to adhere to the procedures required . . . when he failed to consider all relevant evidence submitted by Appellant[.]” Appeal Brief at 4. However, counsel cites to no evidence that the Judge failed to consider. “The appeal brief must state the specific issue or issues being raised, and cite specific portions of the case record supporting any

alleged error.” Directive ¶ E3.1.30. Applicant’s counsel failed to comply with this fundamental requirement and failed to carry his burden on this issue. Second, Applicant argues that the Judge misweighed the evidence and misapplied the mitigating conditions. For example, Applicant asserts that the Judge failed to give appropriate weight to his military service and to the fact that his wife does not work outside the home. Our review of the record confirms that the Judge considered and discussed those matters, as well as the other matters raised by Applicant. None of Applicant’s arguments are enough to rebut the presumption that the Judge considered all of the record evidence or to demonstrate the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. Moreover, the Judge complied with the requirements of the Directive in his whole-person analysis by considering all evidence of record in reaching his decision. See, e.g., ISCR Case No. 19-01400 at 2 (App. Bd. Jun. 3, 2020). Although we give due consideration to the Hearing Office cases that Applicant’s counsel has cited, they are neither binding precedent on the Appeal Board nor sufficient to undermine the Judge’s decision. See, e.g., ISCR Case No. 17-02488 at 4 (App. Bd. Aug. 30, 2018). Applicant failed to establish that the Judge committed any harmful error or that he should be granted any relief on appeal. 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: James F. Duffy James F. Duffy Administrative Judge Chairperson, Appeal Board Signed: James E. Moody James E. Moody Administrative Judge Member, Appeal Board Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Member, Appeal Board