ISCR Case 17-02780.h1

Case Headnote

ISCR Case No. 17-02780.h1

deniedMay 9, 2018· Hon. Caroline E. Heintzelman· hearing

Summary

A 44-year-old operations manager was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial difficulties and delinquent debts. The Statement of Reasons detailed a Chapter 13 bankruptcy filing in 2003, converted to Chapter 7 and discharged in 2004. In 2014, the IRS filed a $117,000 tax lien against the applicant. Additionally, the applicant had eight other delinquent debts totaling $30,433.

Specific allegations included a personal loan from 2012, on which a payment of $5,169.95 was made in December 2017, and two credit card debts from 2012 that remained unpaid. The applicant claimed to have paid or settled several other debts, including a personal loan, two utility bills, and a medical bill, with specific payment dates and amounts provided for some.

Despite claims of financial hardship due to unemployment and attempts to make payments, the judge found that the applicant failed to demonstrate responsible management of her financial obligations. The denial was based on the significant outstanding IRS tax lien, several other unpaid debts, and a failure to establish timely and responsible action to address these obligations, indicating a lengthy and ongoing history of financial issues.

Why the Applicant Was Denied

The applicant has a significant outstanding IRS tax lien and several other unpaid debts.
The applicant did not meet her burden to establish that she acted responsibly to address her unpaid debts in a timely manner.
The applicant's bankruptcy indicates a lengthy history of financial issues that continues to the present day.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability to Satisfy Debts
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations
AG ¶ 19(f)appliedFailure 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

Mitigating

AG ¶ 20(a)rejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur and Does Not Cast Doubt on the Individual's Current Reliability, Trustworthiness, or Good Judgment
AG ¶ 20(b)rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control

Key Rule Quoted

“An applicant does not have to be debt-free in order to qualify for a security clearance.”
— ISCR Case No. 15-02903 at 3 (App. Bd. Mar. 9, 2017)

Procedural Posture

SOR issuedAug 18, 2017
Answer filedOct 9, 2017
Hearing held—Decision made on the record without a hearing.
Decision dateMay 9, 2018

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Significant Outstanding Tax Liens as a Disqualifying Factor
The Burden of Proof Lies with the Applicant to Demonstrate Responsible Financial Management

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	Applicant filed for Chapter 13 bankruptcy protection in 2003. One year later, her bankruptcy was converted into a Chapter 7, and her debts were discharged.	Against Applicant	Bankruptcy Filing	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	In 2014, the Internal Revenue Service (IRS) filed an $117,000 tax lien against Applicant. $117,000	Against Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations (f) failure to file / fraudulent filing of tax returns or unpaid tax	—	—
1.c	In addition to her federal tax lien, Applicant has eight delinquent debts totaling $30,433. $30,433	Against Applicant	Unspecified Financial	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	This account was for a personal loan. Applicant stopped making payments 2012, and the debt was charged off. In her Answer, Applicant admitted to this debt. She made a payment on December 13, 2017, in the amount of $5,169.95. $5,115	For Applicant	Personal Loan Debt	Admitted	—	—	—
1.e	This account was for a credit card. Applicant stopped making payments in 2012, and the debt was charged off. In her Answer, Applicant admitted to this debt, and it has not paid. $4,629	Against Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	Applicant stopped making payments for this account in 2012, and the debt was charged off. Applicant disclosed this debt in her SCA, and indicated that in May 2016 she would start making payments; however, in her Answer, Applicant admitted to this debt, and it has not paid. $3,718	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	In her Answer, Applicant denied this debt and claimed it was paid in July 2016. She made three payments of $532.92 and claims she settled the debt for $1,598.76. $3,084	Against Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	This account was for a utility bill. In her Answer, Applicant denied this debt and claimed it was paid in November 2015. $146	For Applicant	Utility or Phone Debt	Denied	—	—	—
1.i	This account was for a medical bill. In her Answer, Applicant denied this debt and claimed it was paid in July 2016. $228	For Applicant	Medical Debt	Denied	—	—	—
1.j	This account was for a utility bill. In her Answer, Applicant denied this debt and claimed it was paid in July 2016. $224	For Applicant	Utility or Phone Debt	Denied	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant filed for Chapter 13 bankruptcy protection in 2003. One year later, her bankruptcy was converted into a Chapter 7, and her debts were discharged.

Against Applicant

Bankruptcy Filing

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

In 2014, the Internal Revenue Service (IRS) filed an $117,000 tax lien against Applicant.

$117,000

Against Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(f) failure to file / fraudulent filing of tax returns or unpaid tax

—

1.c

In addition to her federal tax lien, Applicant has eight delinquent debts totaling $30,433.

$30,433

Against Applicant

Unspecified Financial

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

This account was for a personal loan. Applicant stopped making payments 2012, and the debt was charged off. In her Answer, Applicant admitted to this debt. She made a payment on December 13, 2017, in the amount of $5,169.95.

$5,115

For Applicant

Personal Loan Debt

Admitted

—

1.e

This account was for a credit card. Applicant stopped making payments in 2012, and the debt was charged off. In her Answer, Applicant admitted to this debt, and it has not paid.

$4,629

Against Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

Applicant stopped making payments for this account in 2012, and the debt was charged off. Applicant disclosed this debt in her SCA, and indicated that in May 2016 she would start making payments; however, in her Answer, Applicant admitted to this debt, and it has not paid.

$3,718

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

In her Answer, Applicant denied this debt and claimed it was paid in July 2016. She made three payments of $532.92 and claims she settled the debt for $1,598.76.

$3,084

Against Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

This account was for a utility bill. In her Answer, Applicant denied this debt and claimed it was paid in November 2015.

$146

For Applicant

Utility or Phone Debt

Denied

—

1.i

This account was for a medical bill. In her Answer, Applicant denied this debt and claimed it was paid in July 2016.

$228

For Applicant

Medical Debt

Denied

—

1.j

This account was for a utility bill. In her Answer, Applicant denied this debt and claimed it was paid in July 2016.

$224

For Applicant

Utility or Phone Debt

Denied

—

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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

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES