Summary
The applicant, a 51-year-old electronics technician and Navy Reservist, faced security concerns under Guideline F due to financial issues, including failure to file tax returns and mortgage foreclosure. The judge found that the applicant had taken significant steps to resolve his financial problems, including filing overdue tax returns and attending financial counseling, leading to a decision to grant his security clearance.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Filed Chapter 13 Bankruptcy in 2015 that was dismissed in 2016. Applicant filed Chapter 13 to save his house, but after eight to nine months could not afford the “well over $3,000 a month” payments (1.a). Failed to file Federal tax returns for tax years 2012, 2013, and 2014. Applicant filed all required Federal tax returns in January 2016, owes “a little over $5,000” to the IRS, and as of his hearing was making $125 monthly payments to the IRS by direct debit (1.b). Failed to file state tax returns for tax years 2012, 2013, and 2014. Post-hearing, Applicant filed documentation that all required state tax returns were filed and paid (1.c). Indebted to his state tax authority in the amounts of $421 for 2012, $839 for 2013, and $365 for 2014, respectively (1.d). Past-due mortgage account for $33,402, with a total balance of $167,965. The mortgage company foreclosed on Applicant’s home and he vacated in September 2016. The proceeds from the sale of the property satisfied the first and second mortgages (1.g). Defense Finance and Accounting Office (DFAS) charged-off account for $445. This debt arose following an audit DFAS conducted following “over the 30 months or so” of active duty Applicant performed and determined that he had been overpaid (1.h). Delinquent accounts for medical co-pays for $78, $312, and $230, respectively (1.i). Collection veterinary account for $33. Debt paid in full in February 2017 (1.l). Charged-off second mortgage account for $35,411. The proceeds from the sale of the property satisfied the first and second mortgages (1.m).
The judge granted the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c), AG ¶ 19(f). The judge applied mitigating conditions AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d), AG ¶ 20(g). The decision turned on the following: Applicant demonstrated a proactive approach to resolving financial issues, including filing overdue tax returns and making payments to the IRS; Applicant attended financial counseling and made lifestyle changes to improve financial stability; The applicant's financial situation was deemed under control at the time of the hearing.
Why the Applicant Prevailed
- Applicant demonstrated a proactive approach to resolving financial issues, including filing overdue tax returns and making payments to the IRS.
- Applicant attended financial counseling and made lifestyle changes to improve financial stability.
- The applicant's financial situation was deemed under control at the time of the hearing.
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 Annual Federal Income Tax Returns
- AG ¶ 20(b)appliedConditions Largely Beyond the Person's Control
- AG ¶ 20(c)appliedReceived Financial Counseling
- AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors
- AG ¶ 20(g)appliedArrangements with Tax Authority
Key Rule Quoted
“Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines.”
Procedural Posture
- SOR issuedJun 3, 2016
- Answer filedUndated
- Hearing heldFeb 9, 2017
- Decision dateFeb 26, 2018
Cite For
- Mitigating Conditions for Financial Considerations Under Guideline F
- Importance of Proactive Financial Management in Security Clearance Cases
- Evaluation of Financial Issues in the Context of Overall Reliability and Trustworthiness