ISCR Case 17-02228.h1

Case Headnote

ISCR Case No. 17-02228.h1

deniedJul 20, 2018· Hon. Jennifer I. Goldstein· hearing

Summary

A 44-year-old divorced male applicant was denied a security clearance under Guideline F (Financial Considerations) due to significant indebtedness and a history of failing to timely file tax returns. The Statement of Reasons detailed several financial concerns, including a $19,471 judgment from 2013, which had increased to approximately $23,900 and was being resolved through $600 monthly wage garnishments. This debt, stemming from a credit card used by his ex-wife for her business, remained unresolved.

Additionally, the applicant had an unresolved $10,119 charged-off account, also from an ex-wife's business credit card, for which he had been unable to contact the collection agent. Two smaller collection accounts, a $92 debt for water delivery and a $61 debt for internet service, were resolved prior to the decision.

Despite some efforts to address his financial situation, the judge found that the applicant's history of not meeting financial obligations, including an unpaid federal tax debt from 2009 and other unresolved debts, was not sufficiently mitigated by his recent actions. Consequently, the security clearance was denied.

Why the Applicant Was Denied

The applicant has a history of not meeting financial obligations, including failing to file tax returns and pay federal income taxes on time.
He has unresolved debts and a significant federal tax debt from 2009 that remains unpaid.
The applicant's financial issues were not sufficiently mitigated by his recent actions or circumstances.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
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

Mitigating

AG ¶ 20(c)appliedThe Individual Has Received or Is Receiving Financial Counseling
AG ¶ 20(g)appliedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed

Key Rule Quoted

“Failure to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified or sensitive information.”

Procedural Posture

SOR issuedJul 28, 2017
Answer filedSep 29, 2017
Hearing heldFeb 7, 2018Hearing conducted as scheduled.
Decision dateJul 10, 2018

Cite For

Insufficient Mitigation of Financial Issues Under Guideline F
Ongoing Financial Obligations as a Disqualifying Factor
Impact of Unresolved Tax Debts on Security Clearance Eligibility

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a–1.g	7 sub-charges — specific text not stated in this decision (4 against, 3 for the applicant).	Mixed			—	—	—
1.h	Applicant was indebted on a $19,471 judgment filed against him in 2013. This debt was for a credit card that Applicant’s wife used for her business. His wages are currently being garnished at the rate of $600 per month by this creditor. He testified the balance of this debt is approximately $23,900. He contacted the company to negotiate a settlement, but the company prefers to resolve the debt through garnishment. This debt is unresolved. $19,471	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.i	Applicant was delinquent on a $10,119 charged-off account. This was for another credit card that Applicant’s ex-wife used for her business. Applicant testified that he has attempted to contact this creditor, but has not been able to reach the collection agent. This debt is unresolved. $10,119	Against Applicant	Credit Card Debt	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.j	Applicant was delinquent on a $92 collection account. This debt was for a home water-delivery service. Applicant’s October 2017 credit report reflects this debt as paid with a zero balance. It is resolved. $92	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	—
1.k	specific text not stated in this decision	For Applicant	Unspecified Financial	Admitted	—	—	—
1.l	Applicant was delinquent on a $61 collection account. This debt was for Applicant’s home internet service. It became delinquent in February 2016. Applicant paid this debt on October 19, 2016. It is resolved. $61	For Applicant	Unspecified Financial	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly	—
1.m–1.u	9 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant			—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a–1.g

7 sub-charges — specific text not stated in this decision (4 against, 3 for the applicant).

Mixed

—

1.h

Applicant was indebted on a $19,471 judgment filed against him in 2013. This debt was for a credit card that Applicant’s wife used for her business. His wages are currently being garnished at the rate of $600 per month by this creditor. He testified the balance of this debt is approximately $23,900. He contacted the company to negotiate a settlement, but the company prefers to resolve the debt through garnishment. This debt is unresolved.

$19,471

Against Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.i

Applicant was delinquent on a $10,119 charged-off account. This was for another credit card that Applicant’s ex-wife used for her business. Applicant testified that he has attempted to contact this creditor, but has not been able to reach the collection agent. This debt is unresolved.

$10,119

Against Applicant

Credit Card Debt

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.j

Applicant was delinquent on a $92 collection account. This debt was for a home water-delivery service. Applicant’s October 2017 credit report reflects this debt as paid with a zero balance. It is resolved.

$92

For Applicant

Unspecified Financial

Admitted

—

(b) conditions largely beyond the person’s control; acted responsibly

—

1.k

specific text not stated in this decision

For Applicant

Unspecified Financial

Admitted

—

1.l

Applicant was delinquent on a $61 collection account. This debt was for Applicant’s home internet service. It became delinquent in February 2016. Applicant paid this debt on October 19, 2016. It is resolved.

$61

For Applicant

Unspecified Financial

Admitted

—

(b) conditions largely beyond the person’s control; acted responsibly

—

1.m–1.u

9 sub-charges — specific text not stated in this decision (for the applicant).

For Applicant

—

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Case Profile

Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES