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ISCR Case 15-08782.a1 — CASE

ISCR Case 15-08782.a1denied

Case Headnote

ISCR Case No. 15-08782.a1

Apr 5, 2017· Hon. Michael Y. Ra'anan· appeal

Summary

An applicant representing herself was denied a security clearance under Guideline F (Financial Considerations) due to significant tax issues. The denial was based on the applicant's failure to file Federal or state income tax returns for nine years and her outstanding back taxes owed to the IRS. These issues raised concerns regarding her judgment and reliability, which are deemed essential for access to classified information.

The judges found that the applicant did not demonstrate a consistent track record of timely compliance with tax laws. While mitigating conditions were considered, the disqualifying conditions related to her financial irresponsibility were paramount.

Ultimately, the applicant's financial problems were determined to indicate a lack of the necessary judgment and reliability, leading to the denial of her security clearance.

Conditions Referenced

Disqualifying

AG ¶ 20(a)raisedFailure to File or Pay Taxes as Required
AG ¶ 20(c)raisedDelinquent Debts

Mitigating

AG ¶ 20(d)rejectedThe Individual Has Made a Good Faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's payment agreement with the IRS did not demonstrate a track record of timely compliance.

Key Rule Quoted

“A person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns and paying taxes when due, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information.”
— ISCR Case No. 14-06808 at 2 (App. Bd. Nov. 23, 2016)

Procedural Posture

SOR issuedJun 8, 2016
Answer filed—
Hearing heldJan 26, 2017
Decision dateApr 5, 2017

Cite For

Denial Based on Failure to File Taxes Under Guideline F
Importance of Fulfilling Legal Obligations for Security Clearance
Rejection of Claims of Stress as a Mitigating Factor in Financial Issues

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 an applicant who was denied a security clearance due to financial considerations under Guideline F. The applicant argued that the Judge's decision was arbitrary and capricious. 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 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 adverse 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's arguments did not demonstrate that the decision was arbitrary, capricious, or contrary to law.

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

SYNOPSIS

KEYWORD: Guideline F DIGEST: Applicant cites to favorable evidence, such as her having held a clearance for many years without incident or concern. Her argument is not enough to rebut the presumption that the Judge considered all of the evidence in the record. Neither is it enough to show that the Judge weighed the evidence in a manner that was arbitrary, capricious, or contrary to law. She also states that without a clearance she will not have a job. We are not permitted to consider the impact of an unfavorable decision. Adverse decision affirmed. CASE NO: 15-08782.a1 DATE: 04/05/2017 DATE: April 5, 2017 In Re: ------------

Applicant for Security Clearance ) ) ) ) ) ) ) ) ISCR Case No. 15-08782

APPEAL BOARD DECISION

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 June 8, 2016, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that decision–security concerns raised under Guideline F (Financial Considerations) of Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive). Applicant requested a hearing. On January 26, 2017, 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 issue on appeal: whether the Judge’s adverse decision was arbitrary, capricious, or contrary to law. Consistent with the following, we affirm. The Judge’s Findings of Fact Applicant did not file Federal or state income tax returns for nine years. In addition she owes back taxes to the IRS.1 The IRS filed a notice of intent to levy her state tax refunds or other property to satisfy her debt. Applicant attributed her problems to stress and anxiety following a marital separation. She stopped filing returns because of her concern about not being able to pay her tax debt. In August 2016, Applicant requested an installment agreement from the IRS. That agency approved an agreement whereby Applicant would pay $100 each month toward the satisfaction of her debt. Applicant submitted evidence of one payment in October 2016. Although Applicant believes that she owes no tax to her state, she has not contacted state authorities or filed her state tax returns. Applicant’s annual salary is about $42,000. She has no savings or retirement funds. She was not certain about how much she had left over after monthly expenses. The Judge’s Analysis The Judge concluded that Applicant’s tax problems did not result from unusual circumstances. He stated that she did not corroborate her claim that anxiety attacks affected her ability to file her returns and noted that she had not sought or received financial counseling. Though acknowledging her payment agreement with the IRS, the Judge stated that Applicant had not demonstrated a track record of timely compliance with tax laws. In the whole-person analysis, the Judge cited to Applicant’s having held a clearance for many years. However, he concluded that her failure to file and pay taxes when due suggests that Applicant has trouble complying with government rules and lacks the judgment and reliability expected of those who have access to classified information.

DISCUSSION

Applicant’s appeal brief includes documents from outside the record. We cannot consider new evidence on appeal. Directive ¶ E3.1.29. Applicant cites to favorable evidence, such as her having held a clearance for many years without incident or concern. Applicant’s argument is not enough to rebut the presumption that the Judge considered all of the evidence in the record. Neither is it enough to show that the Judge weighed the evidence in a manner that was arbitrary, capricious,

FOOTNOTES

1 Applicant admitted an SOR allegation that she owed the IRS $10,000. Tax transcripts that Applicant submitted show delinquent taxes of a little over $5,700. However, as the Judge noted, Applicant did not submit any information about her 2014 Federal income tax obligation. Decision at 2. or contrary to law. See, e.g., ISCR Case No. 13-00502 at 3 (App. Bd. Mar. 7, 2017). Applicant states that without a clearance she will not have a job. We are not permitted to consider the impact of an unfavorable decision. See, e.g., ISCR Case No. 15-06532 at 3 (App. Bd. Feb. 16, 2017). The Judge examined the relevant evidence and articulated a satisfactory explanation for the decision. A person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns and paying taxes when due, 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. 14- 06808 at 2 (App. Bd. Nov. 23, 2016). The decision is sustainable on this record. “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). See also Directive, Enclosure 2 ¶ 2(b): “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the 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