ISCR Case 20-00618

Case Headnote

ISCR Case No. 20-00618

grantedNov 7, 2022· Hon. Richard A. Cefola· hearing

Summary

This case involved a 44-year-old defense contractor employee whose security clearance eligibility was initially questioned under Guideline F (Financial Considerations) due to multiple financial issues. The Statement of Reasons detailed several concerns, including delinquent federal tax debts totaling approximately $11,129 for tax years 2004 and 2005, about $10,241 for 2009, and an additional $99,250 in admitted delinquent federal taxes. The applicant also filed for Chapter 13 Bankruptcy in July 2006, which was dismissed in July 2009 due to missed payments. Furthermore, the applicant had medical debts to Creditor I, amounting to about $7,844, with a past-due portion of about $6,563 recently added to a payment plan.

Disqualifying conditions under Guideline F were raised, citing a history of not meeting financial obligations and an inability or unwillingness to satisfy debts. However, the administrative judge applied several mitigating conditions. The applicant demonstrated a good-faith effort to resolve these financial obligations by filing all required federal income tax returns for tax years 2006-2013, 2015, and 2017.

Crucially, the applicant entered into payment plans with the IRS and other creditors, including making monthly payments to Creditor H through a counseling service. These actions demonstrated a clear intent to address and mitigate past financial issues. Consequently, the administrative judge found that the applicant had taken significant steps to resolve the financial concerns, and eligibility for a security clearance was GRANTED.

Why the Applicant Prevailed

The applicant filed all required tax returns and entered into payment plans with the IRS and creditors.
The applicant demonstrated a good-faith effort to resolve financial obligations and mitigate past issues.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Annual Federal, State, or Local Income Tax Returns or Failure to Pay Annual Federal, State, or Local Income Tax as Required

Mitigating

AG ¶ 20(a)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
AG ¶ 20(c)appliedThe Individual Has Received or Is Receiving Financial Counseling for the Problem From a Legitimate and Credible Source
AG ¶ 20(d)appliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
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

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedDec 4, 2020
Answer filedFeb 23, 2021
Hearing heldJun 6, 2022
Decision dateNov 7, 2022

Cite For

Mitigation of Financial Issues Under Guideline F
Good-faith Efforts to Resolve Tax Debts
Consideration of the Whole-person Concept in Security Clearance Decisions

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

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant was indebted to the Federal Government for delinquent taxes for tax years 2004 and 2005 in an amount totaling about $11,129. $11,129	For Applicant	Tax Unpaid	Admitted	—	—	—
1.b	Applicant admits that he was indebted to the Federal Government for delinquent taxes for tax year 2009 in an amount totaling about $10,241. $10,241	For Applicant	Tax Unpaid	Admitted	—	—	—
1.c	Applicant filed for the protection of a Chapter 13 Bankruptcy in July of 2006, but he was unable to keep up with his payments; and as a result, it was dismissed in July of 2009.	For Applicant	Bankruptcy Filing	Unknown	—	—	—
1.d	Applicant has filed his Federal income tax returns for tax years 2006~2013, 2015 and 2017.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.e	Applicant is making monthly payments to Creditor H, through a creditor counseling service.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.f	Applicant admits that he was indebted to the Federal Government for delinquent taxes in an amount totaling about $99,250. $99,250	For Applicant	Tax Unpaid	Admitted	—	—	—
1.g	Applicant admits that he is indebted to Creditor I as a result of medical debts in an amount totaling about $7,844. $7,844	For Applicant	Medical Debt	Admitted	—	—	—
1.h	Applicant's admitted past-due medical debt to Creditor I, in the amount of about $6,563, has been recently added to Applicant's payment plan. $6,563	For Applicant	Medical Debt	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant was indebted to the Federal Government for delinquent taxes for tax years 2004 and 2005 in an amount totaling about $11,129.

$11,129

For Applicant

Tax Unpaid

Admitted

—

1.b

Applicant admits that he was indebted to the Federal Government for delinquent taxes for tax year 2009 in an amount totaling about $10,241.

$10,241

For Applicant

Tax Unpaid

Admitted

—

1.c

Applicant filed for the protection of a Chapter 13 Bankruptcy in July of 2006, but he was unable to keep up with his payments; and as a result, it was dismissed in July of 2009.

For Applicant

Bankruptcy Filing

Unknown

—

1.d

Applicant has filed his Federal income tax returns for tax years 2006~2013, 2015 and 2017.

For Applicant

Unspecified Financial

Unknown

—

1.e

Applicant is making monthly payments to Creditor H, through a creditor counseling service.

For Applicant

Unspecified Financial

Unknown

—

1.f

Applicant admits that he was indebted to the Federal Government for delinquent taxes in an amount totaling about $99,250.

$99,250

For Applicant

Tax Unpaid

Admitted

—

1.g

Applicant admits that he is indebted to Creditor I as a result of medical debts in an amount totaling about $7,844.

$7,844

For Applicant

Medical Debt

Admitted

—

1.h

Applicant's admitted past-due medical debt to Creditor I, in the amount of about $6,563, has been recently added to Applicant's payment plan.

$6,563

For Applicant

Medical Debt

Unknown

—

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Case Profile

Summary

Why the Applicant Prevailed

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION