ISCR Case 23-02371

Case Headnote

ISCR Case No. 23-02371

deniedJun 6, 2025· Hon. Edward W. Loughran· hearing

Summary

A 58-year-old defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to a history of unresolved financial issues. The Statement of Reasons (SOR) detailed multiple unfiled federal income tax returns for 2014, 2015, 2016, and 2018, and unfiled state income tax returns for 2016 and 2018, along with associated unpaid federal taxes.

The applicant also faced allegations regarding several delinquent debts. While he admitted to owing a $1,245 debt and was making monthly payments, and admitted to a $705 debt that neither he nor the creditor could locate, he denied owing a $1,206 debt and a $9,970 debt. The applicant's claims of having paid a $710 debt, a $647 debt, and a $496 debt were accepted. He also stated he paid a $523 debt in full. Additionally, two alleged debts of $1,449 and $1,619 were identified as duplicates.

Despite some payments and denials, the judge found that the applicant's overall financial management raised significant concerns about reliability and trustworthiness. The applicant did not provide sufficient evidence of a good-faith effort to resolve his financial issues, leading to the denial of eligibility for access to classified information.

Why the Applicant Was Denied

The applicant has a history of financial problems, including unfiled federal and state income tax returns and multiple delinquent debts.
The applicant did not provide sufficient evidence to demonstrate a good-faith effort to resolve his financial issues or to mitigate the security concerns raised by his financial history.

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(c)appliedThe Individual Has Received or Is Receiving Financial Counseling for the Problem From a Legitimate and Credible Source
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 did not demonstrate compliance with tax obligations for all years.

Key Rule Quoted

“A person who fails repeatedly to fulfill his or her legal obligations, such as filing tax returns when due, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information.”
— ISCR Case No. 17-01382 at 4 (App. Bd. May 16, 2018)

Procedural Posture

SOR issuedFeb 2, 2024
Answer filedFeb 14, 2024
Hearing heldApr 10, 2025Rescheduled due to applicant's inability to connect via Microsoft Teams.
Decision dateJun 6, 2025

Cite For

Denial of Security Clearance Due to Unresolved Financial Issues Under Guideline F
Importance of Timely Tax Compliance in Security Clearance Evaluations
Insufficient Evidence of Financial Responsibility as a Basis for Clearance Denial

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

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has a history of financial problems, including unfiled federal and state income tax returns, unpaid federal and state taxes, and delinquent debts.	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	Applicant failed to file his 2014, 2015, 2016, and 2018 federal income tax returns; he failed to file his 2016 and 2018 state income tax returns; and he owed federal taxes for 2014, 2015, 2016, and 2018.	Against Applicant	Tax Filing Failure	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	Applicant admitted he owed the $1,245 delinquent debt alleged in SOR 1.c, but he stated that he was making $120 monthly payments. $1,245	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Documented Payment Plan with Creditor
1.d	Applicant denied owing the $1,206 debt to a collection company on behalf of a bank, as alleged in SOR 1.d. $1,206	Against Applicant	Unspecified Financial	Denied	—	—	—
1.e	Applicant’s statement that he paid the $710 delinquent debt alleged in SOR 1.e is accepted. $710	For Applicant	Unspecified Financial	Unknown	—	—	—
1.f	Applicant admitted he owed the $705 delinquent debt alleged in SOR 1.f, but he stated that he contacted the creditor and the collection company identified in the SOR and neither could locate the account. $705	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.g	Applicant’s statement that he paid the $647 delinquent debt alleged in SOR 1.g is accepted. $647	For Applicant	Unspecified Financial	Unknown	—	—	—
1.h	Applicant denied owing the $523 delinquent alleged in SOR 1.h. He stated in his response to the SOR that he paid the debt in full. $523	Against Applicant	Unspecified Financial	Denied	—	—	—
1.i	Applicant’s statement that he paid the $496 delinquent debt alleged in SOR 1.i is accepted. $496	For Applicant	Unspecified Financial	Unknown	—	—	—
1.j	specific text not stated in this decision $455	For Applicant	Unspecified Financial	Unknown	—	—	—
1.k	The $1,449 delinquent debt alleged in SOR 1.b and the $1,619 delinquent debt alleged in SOR 1.k are duplicate accounts.	For Applicant	Unspecified Financial	Unknown	—	—	—
1.l	Applicant denied owing the $9,970 delinquent debt alleged in SOR 1.l. $9,970	For Applicant	Unspecified Financial	Denied	—	—	—
1.m–1.p	4 sub-charges — specific text not stated in this decision (3 against, 1 for the applicant).	Mixed			—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant has a history of financial problems, including unfiled federal and state income tax returns, unpaid federal and state taxes, and delinquent debts.

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

Applicant failed to file his 2014, 2015, 2016, and 2018 federal income tax returns; he failed to file his 2016 and 2018 state income tax returns; and he owed federal taxes for 2014, 2015, 2016, and 2018.

Against Applicant

Tax Filing Failure

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

Applicant admitted he owed the $1,245 delinquent debt alleged in SOR 1.c, but he stated that he was making $120 monthly payments.

$1,245

For Applicant

Unspecified Financial

Admitted

—

(b) conditions largely beyond the person’s control; acted responsibly

Documented

Payment Plan with Creditor

1.d

Applicant denied owing the $1,206 debt to a collection company on behalf of a bank, as alleged in SOR 1.d.

$1,206

Against Applicant

Unspecified Financial

Denied

—

1.e

Applicant’s statement that he paid the $710 delinquent debt alleged in SOR 1.e is accepted.

$710

For Applicant

Unspecified Financial

Unknown

—

1.f

Applicant admitted he owed the $705 delinquent debt alleged in SOR 1.f, but he stated that he contacted the creditor and the collection company identified in the SOR and neither could locate the account.

$705

Against Applicant

Unspecified Financial

Admitted

—

1.g

Applicant’s statement that he paid the $647 delinquent debt alleged in SOR 1.g is accepted.

$647

For Applicant

Unspecified Financial

Unknown

—

1.h

Applicant denied owing the $523 delinquent alleged in SOR 1.h. He stated in his response to the SOR that he paid the debt in full.

$523

Against Applicant

Unspecified Financial

Denied

—

1.i

Applicant’s statement that he paid the $496 delinquent debt alleged in SOR 1.i is accepted.

$496

For Applicant

Unspecified Financial

Unknown

—

1.j

specific text not stated in this decision

$455

For Applicant

Unspecified Financial

Unknown

—

1.k

The $1,449 delinquent debt alleged in SOR 1.b and the $1,619 delinquent debt alleged in SOR 1.k are duplicate accounts.

For Applicant

Unspecified Financial

Unknown

—

1.l

Applicant denied owing the $9,970 delinquent debt alleged in SOR 1.l.

$9,970

For Applicant

Unspecified Financial

Denied

—

1.m–1.p

4 sub-charges — specific text not stated in this decision (3 against, 1 for the applicant).

Mixed

—

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Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision