ISCR Case 15-08649.h1

Case Headnote

ISCR Case No. 15-08649.h1

deniedNov 13, 2017· Hon. Francisco Mendez· hearing

Summary

A 47-year-old federal contractor was denied a security clearance due to significant financial issues and personal conduct concerns, specifically under Guidelines E (Personal Conduct) and F (Financial Considerations). The applicant failed to report over $50,000 in tax-related judgments and liens on her security clearance application, which was deemed a deliberate falsification. Additionally, she did not report a $16,000 collection account for a repossessed car she had co-signed.

Her financial situation included over $70,000 in unpaid federal and state taxes, with judgments and liens entered against her in February 2012. This debt comprised over $30,000 in past-due federal income taxes for tax years 2009, 2010, and 2014, and over $22,000 in state back taxes. While one $6,500 state tax lien was satisfied, the applicant had a history of not meeting financial obligations and was found to have prioritized personal expenses over tax responsibilities.

The judge determined that the applicant did not provide sufficient evidence to mitigate the security concerns raised by her financial conduct and dishonesty. Consequently, the security clearance was denied.

Why the Applicant Was Denied

Applicant failed to report over $50,000 in judgments and liens for unpaid federal income taxes on her security clearance application.
Applicant's financial problems included over $70,000 in unpaid federal and state taxes, which she did not adequately address or resolve.
The applicant's actions were deemed not in good faith, as she prioritized personal expenses over her tax obligations.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(f)raisedFailure to Pay Annual Federal, State, or Local Income Tax as Required

Mitigating

AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlWhile the applicant cited her husband's unemployment as a factor, it did not sufficiently mitigate the financial concerns.
AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue Creditors or Resolve DebtsThe applicant's actions to resolve her tax debts were deemed insufficient and not in good faith.

Key Rule Quoted

“A security clearance adjudication is not a debt collection process.”

Procedural Posture

SOR issuedJun 10, 2016
Answer filed—
Hearing heldJul 27, 2017Rescheduled from May 25, 2017 at applicant's request.
Decision dateNov 13, 2017

Cite For

Denial Based on Failure to Disclose Significant Tax Liabilities
Impact of Financial Irresponsibility on Security Clearance Eligibility
Importance of Honesty in Security Clearance Applications

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

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant deliberately falsified her security clearance application by failing to report over $50,000 in judgments and liens for unpaid federal income taxes.	Against Applicant	Falsification Security FormFOUND DELIBERATE	Criminal Conduct	Denied	(a) deliberate omission, concealment, or falsification on a security form (b) deliberately providing false information to an investigator or official (c) credible adverse information across areas supporting a whole-person concern	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant deliberately falsified her security clearance application by failing to report over $50,000 in judgments and liens for unpaid federal income taxes.

Against Applicant

Falsification Security FormFOUND DELIBERATE

Criminal Conduct

Denied

(a) deliberate omission, concealment, or falsification on a security form

(b) deliberately providing false information to an investigator or official

(c) credible adverse information across areas supporting a whole-person concern

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant did not report a $16,000 collection account for a car that Applicant had co-signed for a nephew and had been repossessed in approximately 2010. $16,000	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Applicant satisfied the $6,500 state tax lien. $6,500	For Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.c	Applicant did not report the $50,000 in judgments and liens filed against her in February 2012 by the IRS for failing to pay her federal income taxes. $50,000	For Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.d	Applicant owes over $30,000 in past-due federal income taxes for tax years 2009, 2010, and 2014. $30,000	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations (e) consistent spending beyond one’s means / irresponsible spending (f) failure to file / fraudulent filing of tax returns or unpaid tax	—	—
1.e	Applicant owes her state back taxes totaling over $22,000. $22,000	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations (e) consistent spending beyond one’s means / irresponsible spending (f) failure to file / fraudulent filing of tax returns or unpaid tax	—	—
1.f	Applicant has a history of not meeting financial obligations, including unpaid federal and state taxes.	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations (e) consistent spending beyond one’s means / irresponsible spending (f) failure to file / fraudulent filing of tax returns or unpaid tax	—	—
1.g	Applicant's unpaid federal and state tax debts total over $70,000, secured through judgments and liens entered against Applicant in February 2012. $70,000	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations (e) consistent spending beyond one’s means / irresponsible spending (f) failure to file / fraudulent filing of tax returns or unpaid tax	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant did not report a $16,000 collection account for a car that Applicant had co-signed for a nephew and had been repossessed in approximately 2010.

$16,000

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.b

Applicant satisfied the $6,500 state tax lien.

$6,500

For Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.c

Applicant did not report the $50,000 in judgments and liens filed against her in February 2012 by the IRS for failing to pay her federal income taxes.

$50,000

For Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.d

Applicant owes over $30,000 in past-due federal income taxes for tax years 2009, 2010, and 2014.

$30,000

Against Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

(e) consistent spending beyond one’s means / irresponsible spending

(f) failure to file / fraudulent filing of tax returns or unpaid tax

—

1.e

Applicant owes her state back taxes totaling over $22,000.

$22,000

Against Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

(e) consistent spending beyond one’s means / irresponsible spending

(f) failure to file / fraudulent filing of tax returns or unpaid tax

—

1.f

Applicant has a history of not meeting financial obligations, including unpaid federal and state taxes.

Against Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

(e) consistent spending beyond one’s means / irresponsible spending

(f) failure to file / fraudulent filing of tax returns or unpaid tax

—

1.g

Applicant's unpaid federal and state tax debts total over $70,000, secured through judgments and liens entered against Applicant in February 2012.

$70,000

Against Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

(e) consistent spending beyond one’s means / irresponsible spending

(f) failure to file / fraudulent filing of tax returns or unpaid tax

—

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Case Profile

Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES