ISCR Case 24-01222

Case Headnote

ISCR Case No. 24-01222

deniedDec 18, 2025· Hon. Gatha LaFaye· hearing

Summary

A 56-year-old IT professional was denied a security clearance under Guideline F, Financial Considerations, due to significant and unresolved financial issues. The applicant filed for Chapter 13 bankruptcy in March 2023, which was dismissed in July 2023. Additionally, he failed to file federal income tax returns for tax years 2018, 2019, and 2020, and state income tax returns for 2019 and 2020. He owes approximately $2,325 in federal taxes for at least tax year 2023 and about $7,675 in state taxes for tax years 2018, 2019, and 2023.

Further financial concerns included a $322 delinquent consumer debt from October 2000 that was charged off, and a charged-off credit card debt of $40,896. The applicant also had delinquent debts of $74,957 and $2,202 on his first and second mortgages, respectively. While he demonstrated a track record of timely payments on both mortgages since March 2024, this was not enough to overcome the broader pattern of financial instability.

The judge found that the applicant did not provide sufficient evidence to mitigate the financial concerns. His admitted bankruptcy filing and failure to file multiple tax returns, coupled with the various outstanding debts, raised serious doubts about his reliability and trustworthiness, leading to the denial of his security clearance.

Why the Applicant Was Denied

The applicant failed to provide sufficient evidence to mitigate financial concerns under Guideline F.
The applicant admitted to filing for Chapter 13 bankruptcy and failing to file tax returns for several years.
The applicant's financial issues were deemed insufficiently resolved, raising doubts about his reliability.

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

Mitigating

AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
AG ¶ 20(e)appliedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due Debt
AG ¶ 20(g)rejectedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount OwedThe applicant did not provide sufficient evidence of arrangements with the IRS to resolve overdue taxes.

Key Rule Quoted

“Eligibility for access to classified information is denied.”

Procedural Posture

SOR issuedOct 8, 2024
Answer filedNov 19, 2024
Hearing heldJul 17, 2025
Decision dateDec 18, 2025

Cite For

Insufficient Evidence to Mitigate Financial Concerns Under Guideline F
Impact of Financial Distress on Reliability and Trustworthiness
Consideration of Personal Hardships in Financial Cases

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 filed for Chapter 13 bankruptcy in March 2023 and the action was dismissed in July 2023.	For Applicant	Bankruptcy Filing	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	Credited Other
1.b	Applicant failed to file Federal income tax returns for tax year 2018.	For Applicant	Tax Filing Failure	Denied	—	—	Claimed Other
1.c	Applicant failed to file Federal income tax returns for tax years 2019 and 2020.	Against Applicant	Tax Filing Failure	Admitted	—	—	—
1.d	Applicant owes the IRS about $2,325 for unpaid taxes for at least tax year 2023. $2,325	Against Applicant	Tax Unpaid	Admitted	—	—	Claimed Other
1.e	Applicant failed to file state income tax returns for tax years 2019 and 2020.	Against Applicant	Tax Filing Failure	Unknown	—	—	—
1.f	Applicant owes the state about $7,675 for unpaid taxes for tax years 2018, 2019, and 2023. $7,675	Against Applicant	Tax Unpaid	Unknown	—	—	—
1.g	Applicant has a delinquent consumer debt of $322 that was assigned in October 2000 and ultimately charged off. $322	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.h	Applicant has a delinquent credit card debt of $40,896 that was charged off. $40,896	For Applicant	Credit Card Debt	Denied	—	(e) reasonable, documented basis to dispute the debt	Claimed Other
1.i	Applicant has delinquent debts of $74,957 and $2,202 on his first and second mortgages. $74,957	For Applicant	Mortgage or Home Loan Debt	Unknown	—	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Credited Other
1.j	Applicant has a long track record of timely payments since March 2024 on both mortgages.	For Applicant	Unspecified Financial	Unknown	—	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Credited Other
1.k	specific text not stated in this decision	For Applicant	Unspecified Financial	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed for Chapter 13 bankruptcy in March 2023 and the action was dismissed in July 2023.

For Applicant

Bankruptcy Filing

Admitted

—

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

Credited

Other

1.b

Applicant failed to file Federal income tax returns for tax year 2018.

For Applicant

Tax Filing Failure

Denied

—

Claimed

Other

1.c

Applicant failed to file Federal income tax returns for tax years 2019 and 2020.

Against Applicant

Tax Filing Failure

Admitted

—

1.d

Applicant owes the IRS about $2,325 for unpaid taxes for at least tax year 2023.

$2,325

Against Applicant

Tax Unpaid

Admitted

—

Claimed

Other

1.e

Applicant failed to file state income tax returns for tax years 2019 and 2020.

Against Applicant

Tax Filing Failure

Unknown

—

1.f

Applicant owes the state about $7,675 for unpaid taxes for tax years 2018, 2019, and 2023.

$7,675

Against Applicant

Tax Unpaid

Unknown

—

1.g

Applicant has a delinquent consumer debt of $322 that was assigned in October 2000 and ultimately charged off.

$322

Against Applicant

Unspecified Financial

Admitted

—

1.h

Applicant has a delinquent credit card debt of $40,896 that was charged off.

$40,896

For Applicant

Credit Card Debt

Denied

—

(e) reasonable, documented basis to dispute the debt

Claimed

Other

1.i

Applicant has delinquent debts of $74,957 and $2,202 on his first and second mortgages.

$74,957

For Applicant

Mortgage or Home Loan Debt

Unknown

—

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

(c) received/receiving counseling; problem being resolved

(d) good-faith effort to repay or otherwise resolve debts

Credited

Other

1.j

Applicant has a long track record of timely payments since March 2024 on both mortgages.

For Applicant

Unspecified Financial

Unknown

—

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

(c) received/receiving counseling; problem being resolved

(d) good-faith effort to repay or otherwise resolve debts

Credited

Other

1.k

specific text not stated in this decision

For Applicant

Unspecified Financial

Unknown

—

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Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision