Summary
A 59-year-old defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant unresolved financial obligations, primarily delinquent federal and state income taxes. The Statement of Reasons detailed approximately $23,000 in past-due federal income taxes from 2009-2014, a $5,300 state tax lien being paid via garnishment, and a failure to timely file her 2015 federal income tax return.
Additional financial concerns included another $978 garnishment, a $4,397 charged-off private loan, a $305 charged-off debt to an online retailer, a $268 cable bill in collection, and seven medical debts totaling about $750. Disqualifying conditions under Guideline F were raised, while mitigating conditions were also considered.
Despite filing for Chapter 13 bankruptcy, the judge determined that the applicant did not adequately mitigate the financial security concerns. The denial was based on the substantial unresolved tax debts, the failure to timely file the 2015 federal income tax return, and the finding that some financial issues stemmed from the applicant's own poor decisions, such as incurring excessive credit card debt.
Why the Applicant Was Denied
- The applicant has significant unresolved tax debts totaling approximately $28,000.
- The applicant failed to timely file her 2015 federal income tax return, indicating poor financial management.
- The applicant's financial issues were partly due to her own poor decisions, such as incurring excessive credit card debt.
Conditions Referenced
- AG ¶ 19(a)raisedInability to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Annual Federal State, or Local Tax Returns or Failure to Pay Annual Federal, State, or Local Income Tax as Required
- AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlThe applicant's medical debts were due to circumstances beyond her control.
- 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 ArrangementsThe applicant's tax repayment plan was stayed due to bankruptcy.
Key Rule Quoted
“An applicant who fails to timely file or pay his or her taxes, a basic and fundamental financial obligation of all citizens, bears a heavy burden in mitigating the financial considerations security concern.”
Procedural Posture
- SOR issuedDec 3, 2016
- Answer filedDec 20, 2016
- Hearing heldJul 31, 2017
- Decision dateSep 19, 2017
Cite For
- Failure to Mitigate Significant Tax Debts Under Guideline F
- Impact of Personal Financial Decisions on Security Clearance Eligibility
- Importance of Timely Tax Filing in Security Clearance Determinations