Summary
The applicant, a 64-year-old veteran with a bachelor's degree, faced security clearance denial under Guideline F due to significant financial issues, including failure to file and pay federal and state income taxes for multiple years, resulting in numerous tax liens. The judge found insufficient evidence of responsible financial behavior or mitigation of the security concerns raised by the applicant's financial history.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: failed to timely file federal and state income tax returns for tax years 2009, 2010, 2011, and 2014 (1.a). failed to timely pay federal and state income taxes for the same years (1.b). numerous unpaid federal and state tax liens dating from 2006 (1.c). mortgage debt related to two condos in the process of being foreclosed (1.d). mortgage debt related to two condos in the process of being foreclosed (1.e). mortgage debt related to two condos in the process of being foreclosed (1.f). state tax lien of $10,284 (1.g). state tax lien of $50,481 (1.h). federal tax lien of $394,122 (1.i). federal tax lien of $208,687 (1.j). federal tax lien of $9,334 (1.k). federal tax lien of $71,406 (1.l). federal tax lien of $35,279 (1.m). federal tax lien of $839,076 (1.n). federal tax lien of $181,926 (1.o). medical account of $1,449 (1.p). telecommunications account of $181 (1.q).
The judge denied the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(b), AG ¶ 19(c), AG ¶ 19(f). The judge applied mitigating conditions AG ¶ 20(a), AG ¶ 20(b), AG ¶ 20(c), AG ¶ 20(d), AG ¶ 20(g). The decision turned on the following: Applicant failed to timely file federal and state income tax returns for 2009, 2010, 2011, and 2014; Numerous unpaid federal and state tax liens were documented, indicating a history of financial irresponsibility; Applicant did not provide sufficient evidence to demonstrate that his financial problems were largely beyond his control.
Why the Applicant Was Denied
- Applicant failed to timely file federal and state income tax returns for 2009, 2010, 2011, and 2014.
- Numerous unpaid federal and state tax liens were documented, indicating a history of financial irresponsibility.
- Applicant did not provide sufficient evidence to demonstrate that his financial problems were largely beyond his control.
Conditions Referenced
- AG ¶ 19(a)raisedInability to Satisfy Debts
- AG ¶ 19(b)raisedUnwillingness to Satisfy Debts
- AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
- AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Income Tax Returns
- AG ¶ 20(a)rejectedBehavior Unlikely to RecurInsufficient evidence to conclude that the applicant's behavior is unlikely to recur.
- AG ¶ 20(b)rejectedConditions Largely Beyond ControlEvidence does not support that the applicant's financial problems were largely beyond his control.
- AG ¶ 20(c)rejectedReceived Financial CounselingNo evidence provided that the applicant received financial counseling.
- AG ¶ 20(d)rejectedGood-faith Effort to Repay DebtsInsufficient evidence of a good-faith effort to resolve debts.
- AG ¶ 20(g)rejectedArrangements with Tax AuthorityNo evidence of arrangements with tax authorities regarding outstanding debts.
Key Rule Quoted
“Failure to file tax returns suggests that an applicant has a problem with complying with well-established government rules and systems.”
Procedural Posture
- SOR issuedJul 31, 2017
- Answer filedAug 14, 2017Applicant elected to have the case decided on the written record.
- Hearing held—No hearing; decided on the written record.
- Decision dateJul 3, 2018
Cite For
- Failure to Mitigate Financial Issues Under Guideline F
- Significant Tax Liabilities as a Disqualifying Factor
- Importance of Timely Filing Tax Returns for Security Clearance Eligibility