Summary
A 57-year-old former U.S. Army sergeant first class was denied a security clearance due to financial considerations under Guideline F. The applicant failed to file federal and state income tax returns for tax years 2013 through 2019, resulting in a federal debt of $133,196 and a state debt of $32,238, totaling over $165,000.
The Statement of Reasons (SOR) specifically alleged these unfiled returns and outstanding debts. The applicant admitted to all four SOR allegations and provided documentation. Disqualifying conditions under Adjudicative Guideline (AG) ¶ 19(a), AG ¶ 19(c), and AG ¶ 19(f) were raised.
While mitigating conditions under AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d), and AG ¶ 20(g) were applied, the judge found insufficient evidence of resolution or compliance. Despite the applicant acknowledging his tax issues and hiring a tax service, he did not demonstrate timely compliance with tax laws or a clear plan to resolve his debts. The financial issues were recent and not adequately addressed, leading to the denial of his security clearance application.
Why the Applicant Was Denied
- The applicant failed to file federal and state income tax returns for tax years 2013 through 2019, resulting in significant financial obligations.
- The applicant admitted to the allegations but did not demonstrate timely compliance with tax laws or a clear plan to resolve his debts.
- The applicant's financial issues were recent and not adequately addressed, undermining his reliability and judgment.
Conditions Referenced
- 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
- AG ¶ 20(a)rejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur and Does Not Cast Doubt on the Individual's Current Reliability, Trustworthiness, or Good JudgmentThe applicant's tax issues were recent and ongoing.
- AG ¶ 20(b)rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe applicant did not demonstrate that he acted reasonably to address his tax issues.
- AG ¶ 20(c)rejectedThe Individual Has Received or Is Receiving Financial Counseling for the Problem From a Legitimate and Credible SourceInsufficient evidence that the applicant's tax issues are under control or being resolved.
- AG ¶ 20(d)rejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant did not provide proof of payments or a budget to demonstrate ability to make payments.
- 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 lacked a payment agreement with the IRS and did not provide evidence of compliance.
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 issuedSep 22, 2021
- Answer filedOct 15, 2021
- Hearing held—Decision rendered after review of the administrative record.
- Decision dateJun 7, 2022
Cite For
- Failure to File Tax Returns as a Disqualifying Condition Under Guideline F
- Insufficient Evidence of Financial Responsibility and Compliance with Tax Obligations
- The Importance of Timely Resolution of Financial Issues in Security Clearance Determinations