Summary
A 50-year-old shift supervisor for a defense contractor was denied a security clearance under Guideline F (Financial Considerations) due to significant financial issues. The Statement of Reasons alleged the applicant failed to timely file federal tax returns for tax years 2007, 2009-2011, and 2013. Additionally, the applicant incurred federal tax debts of $17.00 for 2008, $305 for 2009, and $10,025 for 2010, along with a state tax debt of $2,919.
Disqualifying conditions related to financial irresponsibility, a history of not meeting financial obligations, and an inability to live within one's means were raised. Mitigating conditions concerning the financial problems being largely beyond the applicant's control, good-faith efforts to resolve the issues, and the problems being remote in time were considered.
Ultimately, the clearance was denied because the applicant failed to timely file federal tax returns for multiple years and incurred substantial tax debts. Crucially, the applicant could not verify the filing of his 2011 federal tax return or provide documentation of an installment agreement for that specific year, leading to concerns about his reliability and trustworthiness.
Why the Applicant Was Denied
- Applicant failed to timely file federal tax returns for tax years 2007, 2009-2011, and 2013.
- Applicant incurred federal tax debts exceeding $10,000 and state tax debts exceeding $2,900.
- Applicant could not verify his filing of the 2011 federal tax return or provide documentation of an installment agreement for that year.
Conditions Referenced
- DC ¶ 19(a)raisedInability to Satisfy Debts
- DC ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
- DC ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- DC ¶ 19(f)raisedFailure 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
- MC ¶ 20(b)rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control and the Individual Acted Responsibly Under the CircumstancesApplicant's cited circumstances do not excuse his past failures to timely file tax returns or pay taxes due.
- MC ¶ 20(d)rejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsApplicant did not provide sufficient documentation of efforts to address his tax obligations.
- MC ¶ 20(g)rejectedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed and Is in Compliance with Those ArrangementsApplicant could not verify compliance with an installment agreement for tax year 2011.
Key Rule Quoted
“Eligibility for access to classified information is denied.”
Procedural Posture
- SOR issuedNov 8, 2016
- Answer filedNov 25, 2016
- Hearing heldAug 3, 2017Applicant requested to keep the record open for additional submissions.
- Decision dateJan 30, 2018
Cite For
- Failure to Timely File Federal Tax Returns as a Disqualifying Condition Under Guideline F
- Importance of Verifying Compliance with Tax Obligations for Security Clearance Eligibility
- Insufficient Progress in Addressing Financial Issues as a Basis for Denial of Security Clearance