Summary
A Department of Defense contractor employee was denied a security clearance under Guideline F (Financial Considerations) due to significant and ongoing financial issues. The Statement of Reasons detailed multiple failures to file federal income tax returns for tax years 2008, 2013, and 2014, as well as state tax returns for 2012, 2013, and 2014. Additionally, the applicant had a delinquent federal tax debt of $2,090 for tax year 2010.
Further financial concerns included nine medical collection accounts totaling approximately $2,451, a $143 television account in collection, and several other medical debts ranging from $15 to $726. A $515 medical judgment was entered in 2015, and a $122 account was charged off. The applicant also experienced a mortgage foreclosure.
Despite a stable income and some debt resolution, the denial was based on the applicant's failure to file tax returns for multiple years, an outstanding federal tax debt of approximately $6,190 without evidence of a repayment plan, and a lack of proactive financial management. The applicant's ongoing financial problems and failure to demonstrate responsible behavior in managing debts ultimately led to the denial of his security clearance.
Why the Applicant Was Denied
- The applicant failed to file federal income tax returns for multiple years, raising concerns about his reliability and judgment.
- He has an outstanding federal tax debt of approximately $6,190 and did not provide evidence of a repayment plan or filed tax returns for several years.
- The applicant's financial problems were ongoing, and he did not demonstrate responsible behavior in managing his debts.
Conditions Referenced
- AG ¶ 19(a)appliedInability to Satisfy Debts
- AG ¶ 19(b)appliedUnwillingness to Satisfy Debts
- AG ¶ 19(c)appliedHistory of Not Meeting Financial Obligations
- AG ¶ 19(f)appliedFailure to File or Fraudulently Filing Tax Returns
- AG ¶ 20(b)appliedConditions Largely Beyond the Person's ControlThe applicant's financial situation was adversely affected by his wife's job loss.
- AG ¶ 20(d)appliedGood-faith Effort to Repay DebtsThe applicant resolved some medical debts but not his tax debts.
- AG ¶ 20(g)rejectedArrangements with Tax AuthorityThe applicant did not provide proof of entering a payment plan or filing outstanding tax returns.
Key Rule Quoted
“An applicant is not required to be debt free, but is required to manage his finances in such a way as to meet his financial obligations.”
Procedural Posture
- SOR issuedJun 12, 2017
- Answer filedJul 20, 2017
- Hearing heldApr 11, 2018
- Decision dateMay 25, 2018
Cite For
- Failure to File Tax Returns as a Disqualifying Condition Under Guideline F
- Ongoing Financial Issues Impacting Security Clearance Eligibility
- The Importance of Proactive Financial Management in Security Clearance Cases