Summary
A 55-year-old president and owner of a limited liability company was denied a security clearance under Guideline F (Financial Considerations) due to significant and ongoing financial issues. The Statement of Reasons detailed multiple concerns, including the applicant's failure to pay employee payroll taxes, personal federal and local taxes, and delinquent personal debts. The IRS filed tax liens against the applicant in 2008 ($31,937), 2010 ($35,942 and $9,123), 2012 ($26,264), and 2017 ($17,613).
Further allegations included an outstanding local government tax debt of approximately $42,000, unfiled 2016 tax returns, and unpaid 2017 taxes. The applicant also settled a $16,575 auto loan deficiency for $8,202. The applicant acknowledged an intent to pay taxes when income allowed.
Despite some efforts to address her financial situation, the judge found that the applicant did not mitigate the security concerns. The denial was based on a history of financial problems, including unpaid taxes and late tax filings. The applicant's tax liability exceeded $200,000 and continued to grow, raising doubts about her reliability and judgment, and her stated intentions to pay debts in the future were not considered a substitute for a track record of repayment.
Why the Applicant Was Denied
- The applicant has a history of financial problems, including unpaid taxes and failure to file tax returns on time.
- The applicant's tax liability exceeds $200,000 and continues to grow, raising doubts about her reliability and judgment.
- Intentions to pay debts in the future do not substitute for a track record of debt repayment.
Conditions Referenced
- 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
- AG ¶ 20(c)appliedThe Individual Has Received or Is Receiving Financial Counseling
- AG ¶ 20(g)rejectedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount OwedThe applicant has not filed her 2016 tax returns and has ongoing tax liabilities.
Key Rule Quoted
“A person who fails repeatedly to fulfill his or her legal obligations, such as paying taxes when due, does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information.”
Procedural Posture
- SOR issuedDec 28, 2017
- Answer filedFeb 15, 2018
- Hearing heldOct 2, 2018
- Decision dateNov 20, 2018
Cite For
- Denial of Security Clearance Due to Ongoing Financial Issues Under Guideline F
- Impact of Unpaid Taxes on Security Clearance Eligibility
- Insufficient Evidence of Financial Responsibility Despite Some Mitigation Efforts