Summary
A 44-year-old federal contractor was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial irresponsibility. The applicant had amassed over $100,000 in delinquent debt, which was recently discharged through Chapter 7 bankruptcy. However, over $70,000 in delinquent federal taxes and student loans remained outstanding.
Specific concerns included the applicant's failure to abide by the terms of an IRS installment agreement, missing the initial four monthly payments, and being two months in arrears on over $40,000 in student loans. The applicant also failed to file federal and state tax returns for tax years 2010 through 2012. While some financial problems were attributed to medical issues and supporting an elderly father, the applicant deliberately changed withholdings in 2010 to increase take-home pay, which was then used for other matters, including a trip to the Caribbean.
Despite receiving credit counseling and signing up for further financial counseling, the judge found insufficient evidence that the applicant's financial issues were under control. The applicant's failure to comply with the IRS agreement and ongoing financial problems led to the conclusion that his financial situation was not under control and problems were likely to recur, resulting in the denial of his security clearance.
Why the Applicant Was Denied
- The applicant failed to mitigate security concerns related to his financial obligations.
- He has over $70,000 in outstanding federal taxes and student loans after discharging over $100,000 in debt through bankruptcy.
- The applicant did not comply with the terms of his IRS installment agreement and was two months in arrears on his student loans.
Conditions Referenced
- AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 19(e)raisedConsistent Spending Beyond One's Means
- AG ¶ 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns
- AG ¶ 20(a)rejectedBehavior Happened so Long Ago or InfrequentlyThe applicant's financial issues are ongoing and recent.
- AG ¶ 20(b)rejectedConditions Largely Beyond the Person's ControlWhile some issues were beyond control, the primary cause was the applicant's financial mismanagement.
- AG ¶ 20(c)appliedReceived Counseling for the ProblemThe applicant received financial counseling but did not demonstrate effective management of his finances.
- AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant's actions did not show a commitment to resolving his financial obligations.
Key Rule Quoted
“An individual is not required to be debt free, or required to resolve all past-due debts simultaneously or even resolve the delinquent debts listed in the SOR first.”
Procedural Posture
- SOR issuedAug 20, 2014
- Answer filedOct 30, 2014
- Hearing heldMar 19, 2015Applicant requested additional time post-hearing to submit evidence.
- Decision dateJun 26, 2015
Cite For
- Denial of Security Clearance Due to Financial Irresponsibility Under Guideline F
- Insufficient Evidence of Financial Control Post-bankruptcy
- Failure to Comply with IRS Installment Agreements as a Disqualifying Factor