Summary
A 62-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant financial issues, primarily concerning federal income taxes. The applicant failed to timely file federal income tax returns and pay taxes for the years 2008 through 2012. As of March 2017, the applicant owed the IRS $36,044, including a $32,495 tax lien from 2013 for the 2008 and 2009 tax years.
While the applicant resolved several other debts, including a $1,912 phone bill in June 2016, a $3,476 electric bill, and four hospital bills totaling $1,360 by April 2017, the substantial unresolved tax lien remained a primary concern. The applicant also planned to pay a $589 car insurance bill after receiving a requested statement.
Despite some mitigating factors, the clearance was denied. The decision cited the applicant's failure to timely file tax returns, the substantial unresolved tax lien, and insufficient evidence that the tax issues were being resolved, indicating poor judgment and reliability.
Why the Applicant Was Denied
- The applicant failed to timely file federal income tax returns for multiple years, indicating poor judgment and reliability.
- The applicant has a substantial unresolved tax lien, which raises concerns about his financial responsibility.
- The applicant did not provide sufficient evidence to demonstrate that his tax issues were being resolved.
Conditions Referenced
- 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
- AG ¶ 20(a)rejectedBehavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to RecurThe applicant's failure to file taxes occurred over a five-year period without a compelling excuse.
- AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe applicant's financial issues were not found to be largely beyond his control.
- AG ¶ 20(c)rejectedReceived or Is Receiving Financial CounselingThe applicant has not received financial counseling.
- AG ¶ 20(d)notedInitiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors
- AG ¶ 20(g)rejectedMade Arrangements with the Appropriate Tax Authority to File or Pay the Amount OwedThe applicant did not provide corroborating documentation to support his claims regarding tax payments.
Key Rule Quoted
“Failure to file income tax returns suggests that an applicant has a problem with complying with well-established government rules and systems.”
Procedural Posture
- SOR issuedSep 28, 2016
- Answer filedNov 2, 2016
- Hearing heldMar 28, 2017
- Decision dateJun 26, 2017
Cite For
- Failure to Timely File Federal Income Tax Returns Under Guideline F
- Substantial Unresolved Tax Debts as a Disqualifying Factor
- Lack of Financial Counseling as a Negative Factor in Security Clearance Evaluations