Summary
A 44-year-old systems administrator, employed by a defense contractor since December 2005, was denied a security clearance under Guideline F (Financial Considerations). The denial stemmed from multiple financial concerns, including two outstanding judgments totaling approximately $20,082. These judgments included a federal tax lien of about $16,038 from July 1994 and an outstanding judgment to a telephone company for approximately $4,044 from April 1993.
Further issues involved a significant history of unfiled tax returns. The applicant had not filed federal income tax returns for tax years 1994 through 2005, nor state income tax returns for the same period. Additionally, neither state nor federal tax returns were filed for tax year 2006, and the applicant did not expect to file them for tax year 2007.
The judge determined that the applicant failed to mitigate these financial security concerns. The applicant's failure to file federal income tax returns for over a decade demonstrated a lack of compliance with financial obligations, and this behavior was characterized as tax fraud and tax evasion, indicating an unwillingness to comply with rules and regulations. Consequently, the security clearance was denied.
Why the applicant was denied
- Applicant has two outstanding judgments totaling approximately $20,082.
- Applicant failed to file federal income tax returns for tax years 1994 to 2005, demonstrating a lack of compliance with financial obligations.
- The applicant's behavior was characterized as tax fraud and tax evasion, indicating an unwillingness to comply with rules and regulations.
Conditions referenced
- FC DC 19(a)raisedInability or Unwillingness to Satisfy Debts
- FC DC 19(b)raisedIndebtedness Caused by Frivolous or Irresponsible Spending
- FC DC 19(c)raisedA History of Not Meeting Financial Obligations
- FC DC 19(d)raisedDeceptive or Illegal Financial Practices
- FC DC 19(e)raisedConsistent Spending Beyond One’s Means
- FC DC 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns
- FC MC 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
Key rule quoted
“An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.”
Procedural posture
- SOR issuedNov 16, 2006
- Answer filedDec 5, 2006
- Hearing heldApr 6, 2007
- Decision dateApr 30, 2007
Cite for
- Failure to File Tax Returns as a Disqualifying Condition Under Guideline F
- Financial Irresponsibility as a Basis for Security Clearance Denial
- Impact of Financial Obligations on Security Clearance Eligibility