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ISCR Case 22-00865 — CASE

Case record

ISCR Case 22-00865

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

Case Profile
Decision Date7/11/2023
Statusdenied
LevelHEARING
TypeSTANDARD ISCR
Participants
Judge: Edward W. Loughran
Government Counsel: Dan O'Reilley
Applicant's Counsel: Carl Anthony Marrone
Case Summary
The applicant in this case was a 64-year-old employee of a defense contractor, who had served in the U.S. military from 1978 until his retirement in 1998. The Department of Defense issued a Statement of Reasons (SOR) citing security concerns under Guideline F, related to financial considerations. The core allegations included a history of tax problems, specifically failing to file and pay federal income taxes for multiple years, which began around 2013.
The applicant admitted to having significant tax issues, including unpaid taxes for several years and the failure to file returns on time. He attributed his financial difficulties to various personal challenges, including health issues and supporting his family. Although he established an installment agreement with the IRS in July 2022 to address his back taxes, he still owed a substantial amount. The applicant presented character witnesses and documentation attesting to his job performance and integrity, asserting that he had learned from his experiences and would file future returns on time.
The administrative judge ruled against the applicant, concluding that he did not sufficiently mitigate the financial concerns. The judge emphasized the importance of resolving any doubts in favor of national security and found that the applicant's ongoing tax liabilities and history of non-compliance with tax obligations raised significant concerns regarding his reliability and trustworthiness. Consequently, the applicant's eligibility for access to classified information was denied.
Guidelines Evaluated
- Guideline FFinancial Considerations · Against Applicant
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Case Headnote

ISCR Case No. 22-00865

deniedJul 11, 2023· Hon. Edward W. Loughran· hearing

Summary

A 64-year-old defense contractor employee was denied a security clearance under Guideline F, Financial Considerations, due to unresolved federal income tax issues. The Statement of Reasons alleged a failure to file or pay federal income taxes for multiple years, specifically 2013, 2014, 2016, 2017, 2018, 2019, and 2020.

Disqualifying conditions under Guideline F were raised, citing the applicant's failure to file federal income tax returns for 2012, 2013, 2014, 2015, 2017, 2018, and 2019. Additionally, the applicant had significant unpaid tax liabilities totaling approximately $196,868 as of June 2022.

While mitigating conditions were considered, the administrative judge ultimately found that the applicant's history of tax issues raised doubts about his judgment and reliability. Despite establishing an installment agreement and filing overdue returns, the applicant did not demonstrate the necessary reliability and judgment for access to classified information, leading to the denial of eligibility.

Why the Applicant Was Denied

The applicant failed to file federal income tax returns for multiple years, including 2012, 2013, 2014, 2015, 2017, 2018, and 2019.
The applicant had significant unpaid tax liabilities totaling approximately $196,868 as of June 2022.
The applicant's history of tax issues raised doubts about his judgment and reliability.

Conditions Referenced

Disqualifying

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(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.The applicant established an installment agreement and made payments toward his tax liabilities.

Key Rule Quoted

“Failure to comply with tax laws suggests that an applicant has a problem with abiding by well-established government rules and systems.”

Procedural Posture

SOR issuedJun 20, 2022
Answer filedJun 30, 2022
Hearing heldJun 15, 2023
Decision dateJul 11, 2023

Cite For

Failure to File Federal Income Tax Returns as a Disqualifying Condition Under Guideline F
Mitigating Conditions Related to Financial Issues and Compliance with Tax Authorities
The Importance of Demonstrating Reliability and Judgment for 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.

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: HearingDecided: denied

The judge found that the applicant had significant financial issues related to unpaid federal income taxes and failure to file tax returns for multiple years. Although the applicant has made efforts to address these issues by filing past-due returns and entering into an installment agreement, the judge ultimately ruled against the applicant's eligibility for a security clearance due to ongoing concerns about his financial responsibility.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Failure 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.	Against Applicant	Tax Filing Failure	Unknown	(f) failure to file / fraudulent filing of tax returns or unpaid tax	—	Claimed Debt Paid in Full
1.b	Failure to pay federal income taxes when they were due for tax years 2013, 2014, 2016, 2017, 2018, 2019, and 2020. $196,000	Against Applicant	Tax Unpaid	Unknown	(f) failure to file / fraudulent filing of tax returns or unpaid tax	—	Claimed Debt Paid in Full

Descriptive standardized rendering of a decided public case (Guideline F). The verbatim source decision is shown in full below.

Full decision

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