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ISCR 24-02104: Guideline F security clearance appeal, denied (2026) · CASE

ISCR Case 24-02104denied

Case headnote

ISCR Case No. 24-02104

Jan 26, 2026· Hon. Moira D. Modzelewski· appeal

Summary

A security clearance applicant, representing himself, was denied clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The applicant failed to timely file federal and state income tax returns for five years and accumulated over $18,800 in delinquent consumer debt.

While the applicant made some payments to the IRS, the appeal board upheld the denial, noting that the financial problems remained unmitigated. The judge found that the applicant's overall handling of his taxes raised lingering security concerns, leading to the application of disqualifying condition AG ¶ 19.

Although mitigating condition AG ¶ 20(g) was considered, it was insufficient to overcome the security concerns. Consequently, the applicant's security clearance was denied.

Conditions referenced

Disqualifying

AG ¶ 19raisedFinancial Considerations

Mitigating

AG ¶ 20(g)appliedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed and Is in Compliance with Those Arrangements.The applicant made a payment to the IRS but did not fully mitigate the tax filing failures.

Key rule quoted

“Any doubt concerning personnel being considered for national security eligibility will be resolved in favor of the national security.”
AG ¶ 2(b)

Procedural posture

SOR issuedJan 2, 2025
Answer filed—
Hearing heldDec 8, 2025
Decision dateJan 26, 2026

Cite for

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Impact of Failure to File Tax Returns on Security Clearance Eligibility
Application of Mitigating Conditions in Financial Considerations 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 involved a denial of security clearance based on financial considerations, specifically failure to file tax returns and delinquent debts. The Applicant challenged the Judge's application of mitigating conditions and the Whole-Person Concept. The Board affirmed the decision, finding no harmful error in the Judge's analysis and conclusions.

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

Judge mis-weighed or ignored evidence, raised by the applicantRejected
Applicant argued that the Judge's analysis of mitigating conditions was internally inconsistent.
Whole-person analysis, raised by the applicantRejected
Applicant contended that the Judge failed to adequately explain why mitigating conditions did not outweigh security concerns.

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 Judge provided a satisfactory explanation for the decision based on the evidence presented.

Standard of review applied

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

Appeal Board panel

Moira Modzelewski (Chair)
Allison Marie
Jennifer I. Goldstein

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. 24-02104

)

) 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: January 26, 2026

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 January 2, 2025, 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 December 8, 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

The SOR alleged that Applicant failed to timely file his federal and state income tax returns for tax years 2019 through 2023, and that he carried over $18,800 in other delinquent consumer debt. Citing Applicant’s reliance on tax advice for his failure to file, the Judge found in Applicant’s favor on the state tax concern and further opined that his three consumer debts were mitigated

because they occurred under unusual circumstances and were being resolved. He resolved the federal tax allegation adversely. On appeal, Applicant challenges the Judge’s application of the mitigating conditions and Whole-Person Concept. For example, the Judge acknowledged Applicant’s $360 payment made to the Internal Revenue Service (IRS) in September 2025 and found that was sufficient to establish AG ¶ 20(g).1 He went onto conclude, however, that Applicant’s “overall handling of his taxes from 2020 to present leaves lingering security concerns” and that his federal tax filing failures were unmitigated. Decision at 11. Applicant challenges the foregoing analysis as internally inconsistent, arguing that after finding a mitigating condition applied, the Judge was required to “meaningfully explain why that mitigating condition does not outweigh the security concerns,” and contending that the Judge’s “decision contains no such explanation.” Appeal Brief at 2. Contrary to this argument, the Judge offered the following thorough explanation for his conclusion that Applicant’s deficient federal tax filings were not fully mitigated: Applicant failed to sufficiently justify his failure to timely file five years of federal tax returns and, despite promising to resolve the tax issues in his 2023 security clearance application, he waited until May 2025 to file his overdue returns, did not submit an offer in compromise to the IRS until August 2025, and made the initial payment on an installment agreement only days before his September 2025 hearing. Moreover, the Judge found that Applicant under-withheld payments to the IRS for several years, including as recently as tax year 2024, and that he has owed federal tax balances since 2020, with his delinquent balance for tax years 2019 through 2024 being approximately $14,000 as of the hearing. The Judge’s decision to afford some mitigative credit to the September 2025 IRS payment did not require him to find Applicant’s federal tax filing concern fully mitigated, and his conclusion that, “considering the evidence ‘as a whole,’ Applicant’s failures regarding his [federal income taxes] are not mitigated” is well-rooted in Appeal Board precedent. Decision at 12 (citing ISCR Case No. 06-10320, 2007 WL 4379279 at *1 (App. Bd. Nov. 7, 2007)). In summary, this and the remainder of Applicant’s arguments on appeal amount to disagreements with the Judge’s weighing of the evidence, which is not sufficient to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. See ISCR Case No. 04-08975, 2006 WL 2725032 at *1 (App. Bd. Aug. 4, 2006) (citation omitted).

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.’” Dep’t 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). 1 AG ¶ 20(g): the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.

ORDER

The decision in ISCR Case No. 24-02104 is AFFIRMED. Signed: Moira Modzelewski Moira Modzelewski Administrative Judge Chair, Appeal Board Signed: Allison Marie Allison Marie Administrative Judge Member, Appeal Board Signed: Jennifer I. Goldstein Jennifer I. Goldstein Administrative Judge Member, Appeal Board