Summary
A 49-year-old retired Navy veteran was denied a security clearance under Guideline F (Financial Considerations) due to significant unresolved financial issues. The applicant had numerous delinquent debts, including a student loan account totaling $35,850 and a home improvement account totaling $10,071, both placed for collection. Additionally, a bank debt of $4,026 was charged off.
The applicant filed for Chapter 13 bankruptcy protection in 2019, but this was dismissed due to a failure to make payments. Further concerns arose from the applicant's failure to file his 2017 federal income tax return on time, resulting in an outstanding federal tax liability of $4,145 and state taxes of $114.
While the applicant did resolve some debts, including two credit union debts totaling $1,863 and $2,452, and paid a medical debt of $263, and initiated a payment plan for HOA judgments totaling $5,778 and $2,877, these actions were insufficient to mitigate the overall financial concerns. The administrative judge concluded that the applicant did not provide enough evidence to establish a sufficient track record of financial responsibility, leading to the denial of the security clearance.
Why the Applicant Was Denied
- The applicant has numerous unresolved delinquent debts.
- The applicant failed to establish a sufficient track record of financial responsibility.
- The applicant did not file his 2017 federal income tax return on time.
Conditions Referenced
- AG ¶ 19(a)raisedInability to Satisfy Debts
- AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
- AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Annual Federal, State, or Local Income Tax Returns
- AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
- AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors
- AG ¶ 20(e)rejectedDispute the Legitimacy of the Past-due DebtThe applicant did not provide sufficient evidence to dispute the legitimacy of the debts.
Key Rule Quoted
“Failure to file tax returns suggests that an applicant has a problem with complying with well-established governmental rules and systems.”
Procedural Posture
- SOR issuedApr 20, 2021
- Answer filedMay 28, 2021
- Hearing heldJun 8, 2022via video teleconference
- Decision dateSep 22, 2022
Cite For
- Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
- Importance of Timely Tax Filing in Security Clearance Evaluations
- Consideration of Financial Mismanagement as a Factor in Trustworthiness Assessments