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Summary

The applicant, a 40-year-old woman employed as a manager by a Department of Defense contractor, faced trustworthiness concerns under Guideline F due to significant unpaid tax liabilities stemming from her involvement in a logging business with her stepfather. Despite the long-standing nature of the debts, the applicant demonstrated ongoing efforts to resolve her tax issues with the IRS, which ultimately led to the granting of her eligibility for a public trust position.

Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: Unpaid federal taxes totaling $4,918.00, released May 2002 (1.a). Unpaid federal taxes totaling $4,918.00, collection possibly barred by the federal statute of limitations (1.b). Unpaid federal taxes totaling $9,073.00, collection possibly barred by the federal statute of limitations (1.b). Unpaid federal taxes totaling $7,971.00, unpaid (1.h). Unpaid federal taxes totaling $7,971.00, unpaid (1.h). Unpaid federal taxes totaling $18,694.00, unpaid (1.i). Unpaid federal taxes totaling $1,942.00, unpaid (1.j). Unpaid federal taxes totaling $4,756.00, unpaid (1.k). Unpaid federal taxes totaling $7,213.00, unpaid (1.n). Unpaid federal taxes totaling $4,290.00, unpaid (1.o). Unpaid federal taxes totaling $1,759.00, unpaid (1.p). Unpaid state taxes totaling $835.00, unpaid (possibly barred from collection by the Statute of Limitations) (1.c). Unpaid state taxes totaling $1,313.00, unpaid (possibly barred from collection by the Statute of Limitations) (1.d). Unpaid state taxes totaling $247.00, unpaid (possibly barred from collection by the Statute of Limitations) (1.e). Unpaid state taxes totaling $548.00, unpaid (1.f). Unpaid state taxes totaling $1,144.00, released August 2004 (1.g). Unpaid state taxes totaling $2,838.00, unpaid (1.l). Unpaid state taxes totaling $3,675.00, unpaid (1.m).

The judge granted the clearance. The government raised disqualifying conditions DC ¶ 19 (a), DC ¶ 19 (c). The judge applied mitigating conditions MC ¶ 26 (a), MC ¶ 20 (d). The decision turned on the following: The applicant actively worked with the IRS to resolve her tax problems over several years; The IRS declared her unpaid taxes as 'uncollectible', indicating a lack of enforcement action against her; The applicant's tax issues arose from a business operated as a sole proprietorship, which she no longer manages.

Why the Applicant Prevailed

• The applicant actively worked with the IRS to resolve her tax problems over several years.
• The IRS declared her unpaid taxes as 'uncollectible', indicating a lack of enforcement action against her.
• The applicant's tax issues arose from a business operated as a sole proprietorship, which she no longer manages.

Conditions Referenced

Key Rule Quoted

“The failure or inability 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 information.”

Procedural Posture

• SOR issuedDec 11, 2006
• Answer filedJan 10, 2007Applicant submitted a notarized response to the allegations.
• Hearing heldApr 10, 2007Hearing conducted with both parties presenting evidence.
• Decision dateMay 31, 2007

Cite For

• Mitigation of Financial Issues Under Guideline F Due to Long-standing Efforts to Resolve Tax Liabilities
• Consideration of the Irs's Classification of Unpaid Taxes as 'uncollectible' in Trustworthiness Determinations
• The Impact of Business Structure on Personal Financial Responsibility in Security Clearance Cases.