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ISCR Case 21-01221 — CASE

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ISCR Case 21-01221

A decided public DOHA case, shown for research — not advice or a prediction.

Case Profile
Decision Date3/27/2023
Statusdenied
LevelHEARING
TypeSTANDARD ISCR
Participants
Judge: Robert Robinson Gales
Government Counsel: Carroll J. Connelley
Applicant's Counsel: Patrick K. Korody
Case Summary
The applicant in this case was a 64-year-old employee of a defense contractor, seeking a security clearance. The adjudicative guidelines at issue were related to financial considerations, specifically Guideline F. The Statement of Reasons (SOR) alleged multiple financial issues, including failure to file and pay federal and state income taxes for several years, resulting in significant tax liens against him.
The applicant admitted to most of the allegations in the SOR, acknowledging his failure to file tax returns for the years 2015 and 2016, and the existence of federal and state tax liens. He attributed his financial difficulties to personal issues, including a divorce, and claimed to have made some payments towards his tax debts. However, he also admitted that his divorce did not directly cause his failure to file taxes. The applicant provided evidence of payments made to the IRS and expressed intentions to resolve his tax debts, but he faced challenges in negotiating with the IRS due to the pandemic.
The administrative judge ruled to deny the applicant's eligibility for a security clearance, concluding that he failed to sufficiently mitigate the security concerns related to his financial issues. The judge noted that the applicant's admissions and explanations did not demonstrate a clear and consistent effort to resolve his tax obligations, which raised concerns about his reliability and trustworthiness in handling classified information.
Guidelines Evaluated
- Guideline FFinancial Considerations · For Applicant
- Guideline FFinancial Considerations · Against Applicant
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Case Headnote

ISCR Case No. 21-01221

deniedMar 27, 2023· Hon. Robert Robinson Gales· hearing

Summary

A 64-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to unresolved financial issues, including unpaid taxes and associated tax liens. The applicant failed to timely file federal and state income tax returns for multiple years, leading to federal and state tax liens being entered against him. These actions were cited as evidence of a lack of financial responsibility.

The applicant admitted to most of the allegations and claimed to be working towards resolving his financial problems. Disqualifying conditions raised included AG ¶ 19(a), AG ¶ 19(c), and AG ¶ 19(f). Mitigating conditions AG ¶ 20(b) and AG ¶ 20(d) were applied.

However, the judge found the applicant's explanations for his financial issues insufficient to mitigate the concerns. Ultimately, the judge determined there was insufficient evidence of good judgment and reliability, resulting in the denial of the security clearance.

Why the Applicant Was Denied

The applicant failed to timely file federal and state income tax returns for multiple years.
Federal and state tax liens were entered against the applicant due to unpaid taxes, indicating a lack of financial responsibility.
The applicant's explanations for his financial issues were deemed insufficient to mitigate the concerns.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
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

Mitigating

AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlThe judge found that the applicant's financial issues were not solely due to circumstances beyond his control.
AG ¶ 20(d)rejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's efforts were deemed insufficient and not timely.

Key Rule Quoted

“Failure to file tax returns suggests that an applicant has a problem with complying with well-established governmental rules and systems.”
— ISCR Case No. 01-05340 at 3 (App. Bd. Dec. 20, 2002)

Procedural Posture

SOR issuedAug 13, 2021
Answer filed—
Hearing heldNov 9, 2022via Microsoft Teams
Decision dateMar 27, 2023

Cite For

Failure to Mitigate Financial Concerns Under Guideline F
Insufficient Evidence of Good Judgment and Reliability
Impact of Tax Compliance on Security Clearance Eligibility

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

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.