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ISCR 23-02412: Guideline F security clearance appeal, denied (2025) · CASE

ISCR Case 23-02412denied

Case headnote

ISCR Case No. 23-02412

Sep 9, 2025· Hon. Moira D. Modzelewski· appeal

Summary

The applicant, representing himself, was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. Specifically, the denial cited the applicant's failure to file tax returns and delinquent debts, raising Disqualifying Conditions F1 and F3.

While the applicant admitted to some tax filing failures, he claimed to have subsequently filed the returns. However, he could not provide sufficient corroborating evidence to support these claims. The judge found that the applicant's explanations for the tax filing failures lacked adequate documentation.

Despite the application of Mitigating Condition F2, the lack of verifiable evidence for tax filings and the unsupported explanations led to the denial being upheld on appeal. The security clearance was ultimately denied.

Conditions referenced

Disqualifying

F1raisedFailure to File or Pay Taxes
F3raisedDelinquent Debts

Mitigating

F2appliedThe Individual Has Made a Good Faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant was found to be working to resolve some delinquent debts.

Key rule quoted

“The general standard is that a clearance may be granted only when ‘clearly consistent with the interests of the national security.’”
Department of the Navy v. Egan, 484 U.S. 518, 528 (1988)

Procedural posture

SOR issuedMar 25, 2024
Answer filed—Applicant represented himself.
Hearing held—Hearing details not specified.
Decision dateSep 9, 2025Decision affirmed on appeal.

Cite for

Failure to Provide Corroborating Evidence for Tax Filings Under Guideline F
Consideration of Identity Theft as a Factor in Tax Filing Delinquencies
The Burden of Proof on the Applicant to Mitigate Disqualifying Conditions

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 was filed by the Applicant after the Administrative Judge denied his security clearance based on financial considerations, specifically tax filing delinquencies. The Applicant argued that the Judge made significant errors in findings and misapplied guidelines. The Board affirmed the Judge's decision, finding that the errors raised were either harmless or did not warrant a reversal.

Appealed bythe applicant

Applicant representationPro se (self-represented)

Judge belowMark Harvey denied the clearance (split findings)

Decided ona hearing

Guidelines belowGuideline F

What the Board reviewed

Erroneous finding of fact, raised by the applicantError sustained
The Judge made a factual error regarding state income tax obligations.
Erroneous finding of fact, raised by the applicantError found, but harmless
The Judge failed to consider evidence that Applicant filed all federal tax returns in 2023.
Decision arbitrary, capricious, or contrary to law, raised by the applicantRejected
The Judge misapplied adjudicative guidelines and incorrectly assessed intent.

Error found, but harmless. The Board agreed the judge made a mistake but affirmed anyway, because it did not change the outcome.

Why the Board ruled this way

The Board found that the Judge's conclusions were not arbitrary, capricious, or contrary to law, and that the record supported the Judge's findings and conclusions.

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

Moira Modzelewski (Chair)
Jennifer I. Goldstein
Allison Marie

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. 23-02412

)

) 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: September 9, 2025

APPEAL BOARD DECISION

APPEARANCES

FOR GOVERNMENT Andrea M. Corrales, Esq., Deputy Chief Department Counsel FOR APPLICANT Pro se The Department of Defense (DoD) declined to grant Applicant a security clearance. On March 25, 2024, DoD issued a Statement of Reasons (SOR) advising Applicant of the basis of that decision – security concerns raised under Guideline F (Financial Considerations) of the National Security Adjudicative Guidelines (AG) in Appendix A of Security Executive Agent Directive 4 (effective June 8, 2017) and DoD Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). On July 22, 2025, Defense Office of Hearings and Appeals Administrative Judge Mark Harvey denied Applicant national security eligibility. Applicant appealed pursuant to Directive ¶¶ E3.1.28 and E3.1.30.

DISCUSSION

Under Guideline F, the SOR alleged that Applicant failed to timely file his federal and state income tax returns for tax years 2018 through 2022, and that he carried five delinquent debts totaling approximately $4,000. In response to the SOR, Applicant admitted the tax failures but asserted that the delinquent returns were filed as of March 2024. He also admitted two of the delinquent debts and explained that he planned to arrange repayment and denied the remaining

three debts on the basis that they were paid in full. Noting that Applicant sufficiently established that he had resolved or was working to resolve his delinquent consumer debt, the Judge found favorably on those five allegations. He resolved the tax allegations adversely, however, acknowledging Applicant’s claim that “he filed all required tax returns,” but finding that Applicant failed to corroborate his claims, despite being “given time after his hearing to provide [Internal Revenue Service] tax transcripts or copies of his tax returns or other evidence to show that he had filed all tax returns.” Decision at 10. On appeal, Applicant argues that “significant errors in the Judge’s findings, including a factual error regarding state income tax obligations . . . , failure to consider evidence that [he] filed all federal tax returns in 2023, failure to consider stolen identity, misapplication of adjudicative guidelines, and incorrect assessment of intent . . . materially affected the outcome of the case.” Appeal Brief at 1. Applicant first challenges the Judge’s adverse finding regarding his state tax returns on the basis that he resides in a state that “does not impose a state income tax on individuals” and therefore had no filing obligation. Appeal Brief at 1. In reply, the Government acknowledges that, although Applicant previously and repeatedly admitted the allegation and his belief that he was required to file state income tax returns, Applicant’s argument raised for the first time on appeal has merit and the SOR erroneously alleged the state-level filing failure. The Government goes on to argue that, because “the Judge properly found unmitigated Applicant’s delinquent Federal tax returns,” the state tax return “error was harmless and does not warrant reversing the Judge’s unfavorable Decision.” Reply Brief at 3. We agree. Regarding the federal taxes, Applicant argues that the Judge failed to properly consider the circumstances leading to his tax filing delinquencies, including that he was the victim of identity theft in about 2018 and fraudulent tax returns were filed in his name, which he asserts complicated his “ability to file legitimate returns.” Appeal Brief at 2. He also argues that the Judge erred by failing to consider evidence showing that Applicant filed the returns, including copies of the filings themselves. Neither argument is persuasive. Contrary to Applicant’s first argument, the Judge detailed Applicant’s explanation of “identify theft” for his filing failures throughout the Decision’s factual findings, but ultimately concluded that Applicant failed to sufficiently demonstrate that he had resolved the issue with supporting documentation. Turning then to the evidentiary component of Applicant’s argument and despite his contention that he submitted copies of his filed federal tax returns or any other evidence demonstrating that the returns have been filed, the record is devoid of any such documentation. Rather, the record reflects that Applicant was given multiple opportunities to provide documentation corroborating his explanation for failing to timely file his federal tax returns and their subsequent filing. He responded to Government interrogatories on January 25, 2024, asserting that he filed his 2018 to 2022 federal returns that same day. Government Exhibit 4 at 13.1 Despite being instructed to provide his IRS Tax Account Statements for those tax years, Applicant instead provided IRS Wage and Income Statements. Id. at 13, 17-39. Unlike the requested Tax Account Statements, which offer a comprehensive overview of a taxpayer’s tax activity for a specific tax 1 Notably, in his subsequent SOR response, Applicant asserted that he filed the federal returns two months after his interrogatory response, in March 2024.

year, Wage and Income Statements reflect only data reported to the IRS by third parties via information returns (i.e., Forms W-2, 1099, 1098, or 5498.). The Government noted this evidentiary hole at hearing when it indicated that there was no evidence, including via the Wage and Income Statements, that Applicant’s federal returns had been filed. Tr. at 15, 33-34. At the end of the hearing, the Judge emphasized the importance of Applicant submitting additional documentation to support the purported federal filings and any resulting balance owed, and he offered to leave the record open for two months to accommodate Applicant’s submission. Applicant believed one month was sufficient and expected to produce evidence of the identity theft police report and his IRS tax transcripts for the preceding five years. Id. at 52-55. Despite that month and the Judge’s proactive offer to extend the submission window, if necessary, for Applicant to produce the documentation, the Judge “did not receive any requests for additional time or post-hearing documents from Applicant.” Decision at 2. As a result, the Judge found that he could not “credit [Applicant] with filing those five years of tax returns without receipt of readily available corroboration to prove those tax returns were actually filed,” and concluded that Applicant’s “failure to prove that he took timely, prudent, responsible, and good-faith actions regarding his taxes raises unmitigated questions about his reliability, trustworthiness, and ability to protect classified information.” Decision at 8, 11. Once the Government met its burden of demonstrating a prima facie case regarding Applicant’s tax filing failures, the burden shifted to Applicant to present evidence to rebut, extenuate, or mitigate the evidence against him. Despite multiple opportunities to do so before and after the hearing, Applicant produced no such documentary evidence. Accordingly, it was not arbitrary, capricious, or contrary to law for the Judge to decline to accept Applicant’s unsupported claims that he had resolved his federal tax filings.

CONCLUSION

Applicant has not established that the Judge’s conclusions were arbitrary, capricious, or contrary to law. Rather, the Judge examined and weighed the disqualifying and mitigating evidence and articulated a satisfactory explanation for the decision. The record is sufficient to support that the Judge’s findings and conclusions are sustainable. “The general standard is that a clearance may be granted only when ‘clearly consistent with the interests of the national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). “Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.” AG ¶ 2(b).

ORDER

The decision in ISCR Case No. 23-02412 is AFFIRMED. Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Chair, Appeal Board Signed: Jennifer I. Goldstein Jennifer I. Goldstein Administrative Judge Member, Appeal Board Signed: Allison Marie Allison Marie Administrative Judge Member, Appeal Board