Summary
A 46-year-old defense contractor manager was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues. The Statement of Reasons detailed his failure to timely file federal income tax returns for tax years 2011, 2012, 2013, 2014, 2016, 2017, and 2018. Additionally, he failed to pay federal income taxes for 2011, 2012, 2013, 2015, and 2019. A tax lien was filed against his assets in 2015 for delinquent 2011 income tax.
Despite an adjusted gross income of $146,326 in 2019, the applicant provided limited verified efforts to resolve these issues, primarily initiating periodic installment agreements that were subsequently canceled. Disqualifying conditions related to financial irresponsibility were raised, while mitigating conditions concerning the financial problems being caused by circumstances beyond the applicant's control or the applicant having initiated a good-faith effort to resolve the issues were considered.
Ultimately, the clearance was denied because the applicant failed to demonstrate a good-faith effort to resolve his ongoing financial issues, including a lack of financial counseling or a clear plan to address his debts. This raised doubts about his reliability and judgment, leading to the conclusion that granting clearance was not consistent with national interest.
Why the Applicant Was Denied
- The applicant failed to timely file federal income tax returns for multiple years, including 2016, 2017, and 2018, and did not pay federal income taxes owed for several years.
- He did not demonstrate a good-faith effort to resolve his financial issues, as evidenced by the lack of financial counseling or a clear plan to address his debts.
- The applicant's financial issues were ongoing and unresolved, raising doubts about his reliability and judgment.
Conditions Referenced
- AG ¶ 19(a)appliedInability to Satisfy Debts
- AG ¶ 19(b)appliedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
- AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations
- AG ¶ 19(f)appliedFailure 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
- AG ¶ 20(d)rejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant made promises to resolve debts but did not provide evidence of actual resolution efforts.
- AG ¶ 20(g)rejectedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed and Is in Compliance with Those ArrangementsThe applicant's tax issues remained unresolved despite some payments.
Key Rule Quoted
“Eligibility for a security clearance is denied.”
Procedural Posture
- SOR issuedMay 13, 2021
- Answer filedJul 20, 2021Applicant elected to have the case decided on the written record.
- Hearing held—Decision made based on written record.
- Decision dateFeb 10, 2022
Cite For
- Failure to File Federal Income Tax Returns as a Disqualifying Condition Under Guideline F
- Lack of Evidence of Financial Counseling or a Plan to Resolve Debts
- Ongoing Financial Issues Raising Doubts About Reliability and Judgment