Summary
A 47-year-old engineering-production manager was denied a security clearance under Guideline F (Financial Considerations) due to a history of unfiled federal income tax returns and unresolved tax obligations. The Statement of Reasons specifically cited the applicant's failure to timely file federal individual income tax returns for tax years 2011 through 2015.
Disqualifying conditions included a pattern of financial irresponsibility and an inability or unwillingness to satisfy debts. While the applicant presented evidence of good character, mitigating conditions such as the financial problems not being recent and the applicant having received counseling were considered.
Ultimately, the clearance was denied because the applicant failed to file federal income tax returns for tax years 2011-2015, with this failure extending through 2016. The applicant also did not know the total amount owed to the IRS and state tax authority in back taxes, penalties, and interest, and had not made arrangements to file past-due returns or pay owed taxes. This demonstrated a lack of judgment and responsibility, raising security concerns.
Why the Applicant Was Denied
- The applicant failed to file federal income tax returns for tax years 2011-2015, and this failure extended through 2016.
- The applicant did not know how much he owed in back taxes, penalties, and interest to the IRS and state tax authority.
- The applicant has not made arrangements with the IRS to file past-due returns or pay owed taxes.
Conditions Referenced
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 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
- AG ¶ 20(b)rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlThe applicant did not act responsibly under the circumstances.
- AG ¶ 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 ArrangementsThe applicant is not in an arrangement with the IRS to resolve his tax issues.
Key Rule Quoted
“Failure to comply with federal and/or state tax laws suggests that an applicant has a problem with abiding by well-established government rules and regulations.”
Procedural Posture
- SOR issuedMay 18, 2017
- Answer filedJul 12, 2017Applicant admitted the allegation.
- Hearing heldApr 18, 2018Hearing rescheduled due to a government shutdown.
- Decision dateJul 31, 2018
Cite For
- Denial of Security Clearance Due to Unresolved Tax Issues Under Guideline F
- Importance of Timely Compliance with Tax Obligations for Security Clearance Eligibility
- Consideration of Personal Character Evidence in the Context of Financial Irresponsibility