ISCR Case 17-03032.h1

Case Headnote

ISCR Case No. 17-03032.h1

deniedJul 19, 2018· Hon. Carol G. Ricciardello· hearing

Summary

A 42-year-old federal contractor was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial irresponsibility, including multiple failures to file federal income tax returns and a past conviction for check fraud.

The Statement of Reasons (SOR) detailed two medical debts, one for $99 and another for $295. The applicant resolved the $99 debt, which she stated was incorrectly listed under her daughter's name. The $295 debt was successfully disputed as it had been paid directly by her insurer. However, the applicant admitted to failing to file federal income tax returns for tax years 2009, 2012, 2014, 2015, and 2016, acknowledging that penalties and interest would apply.

The denial was based on the applicant's failure to file tax returns for multiple years, which raised concerns about her reliability and judgment. Insufficient evidence was provided to demonstrate that these tax issues were resolved or unlikely to recur. Additionally, the applicant's past conviction for check fraud was cited as an indicator of poor judgment.

Why the Applicant Was Denied

The applicant failed to file her federal income tax returns for multiple years, raising concerns about her reliability and judgment.
Insufficient evidence was provided to demonstrate that the applicant's tax issues were resolved or unlikely to recur.
The applicant's past conviction for check fraud indicated a lack of good judgment.

Conditions Referenced

Disqualifying

F.19(a)raisedInability to Satisfy Debts
F.19(c)raisedA History of Not Meeting Financial Obligations
F.19(g)raisedFailure to File or Fraudulently Filing Annual Federal, State, or Local Income Tax Returns

Mitigating

F.20(a)appliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
F.20(d)appliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
F.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 failed to provide documented proof that her 2009 federal income tax return has been filed.

Key Rule Quoted

“Failure to file tax returns suggests that an applicant has a problem with complying with well-established government rules and systems.”
— ISCR Case No. 14-04437 at 3 (App. Bd. Apr. 15, 2016)

Procedural Posture

SOR issuedDec 7, 2017
Answer filedDec 20, 2017
Hearing held—Decided on the written record
Decision dateJul 19, 2018

Cite For

Failure to File Tax Returns as a Disqualifying Condition Under Guideline F
The Impact of Unresolved Tax Issues on Security Clearance Eligibility
The Importance of Demonstrating Good Judgment and Reliability for Access to Classified Information

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	The SOR alleges Applicant had two medical debts (¶ 1.a-$99 and ¶ 1.b-$295). She stated she was unaware of the debt in SOR ¶ 1.a because it was listed under her daughter’s name incorrectly. She has paid it. $99	For Applicant	Medical Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	The SOR alleges Applicant had two medical debts (¶ 1.a-$99 and ¶ 1.b-$295). She successfully disputed the debt in SOR ¶ 1.b because it was paid by her insurer directly to the creditor. $295	For Applicant	Medical Debt	Denied	—	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	Applicant admitted she failed to file her federal income tax returns for tax years 2009, 2012, 2014, 2015, and 2016 as alleged in the SOR ¶ 1.c.	Against Applicant	Tax Filing Failure	Admitted	(g) unexplained affluence	—	—
1.d	Applicant admitted she failed to file her federal income tax returns for tax years 2009, 2012, 2014, 2015, and 2016 as alleged in the SOR ¶ 1.c. She further stated in her answer to the SOR: I know there will be penalties and interest added on the top of these once the IRS processes them.	For Applicant	Tax Filing Failure	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The SOR alleges Applicant had two medical debts (¶ 1.a-$99 and ¶ 1.b-$295). She stated she was unaware of the debt in SOR ¶ 1.a because it was listed under her daughter’s name incorrectly. She has paid it.

$99

For Applicant

Medical Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Documented

Debt Paid in Full

1.b

The SOR alleges Applicant had two medical debts (¶ 1.a-$99 and ¶ 1.b-$295). She successfully disputed the debt in SOR ¶ 1.b because it was paid by her insurer directly to the creditor.

$295

For Applicant

Medical Debt

Denied

—

(d) good-faith effort to repay or otherwise resolve debts

Documented

Debt Paid in Full

1.c

Applicant admitted she failed to file her federal income tax returns for tax years 2009, 2012, 2014, 2015, and 2016 as alleged in the SOR ¶ 1.c.

Against Applicant

Tax Filing Failure

Admitted

(g) unexplained affluence

—

1.d

Applicant admitted she failed to file her federal income tax returns for tax years 2009, 2012, 2014, 2015, and 2016 as alleged in the SOR ¶ 1.c. She further stated in her answer to the SOR: I know there will be penalties and interest added on the top of these once the IRS processes them.

For Applicant

Tax Filing Failure

Admitted

—

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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