Summary
The applicant, a 55-year-old defense contractor and retired Air Force master sergeant, faced security clearance denial under Guideline F due to unresolved financial issues, including failure to timely file state and federal tax returns and significant tax debts. Despite some progress in addressing his tax obligations, the applicant's lack of clarity regarding his total tax liabilities and ongoing financial difficulties led to the conclusion that security concerns were not mitigated.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: SOR ¶ 1.a alleges a bank debt for $4,590 (1.a). SOR ¶ 1.b alleges a bank debt for $626 (1.b). SOR ¶ 1.c alleges a state tax lien for $46,470 entered in 2010 (1.c). SOR ¶ 1.d alleges a state tax lien for $12,582 entered in 2013 (1.d). SOR ¶ 1.e alleges a state tax lien for $6,163 entered in 2013 (1.e). SOR ¶ 1.f alleges Applicant failed to file his state tax returns for tax years 2003 through 2010 (1.f). SOR ¶ 1.g alleges he failed to file his federal income tax returns for tax years 2007 through 2010 (1.g). SOR ¶ 1.h alleges Applicant filed for bankruptcy under Chapter 13 of the Bankruptcy Code in September 2000, and in April 11, 2003, his bankruptcy was dismissed (1.h).
The judge denied the clearance. The government raised disqualifying conditions 19(a), 19(c), 19(g). The decision turned on the following: Applicant failed to timely file state and federal tax returns for multiple years; Applicant owes significant amounts in state and federal taxes, totaling approximately $70,000; Applicant was unable to demonstrate a clear understanding of his financial obligations or the status of his tax filings.
Why the Applicant Was Denied
- Applicant failed to timely file state and federal tax returns for multiple years.
- Applicant owes significant amounts in state and federal taxes, totaling approximately $70,000.
- Applicant was unable to demonstrate a clear understanding of his financial obligations or the status of his tax filings.
Conditions Referenced
- 19(a)raisedInability or Unwillingness to Satisfy Debts
- 19(c)raisedA History of Not Meeting Financial Obligations
- 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns as Required
Key Rule Quoted
“Failure to file tax returns suggests that an applicant has a problem with complying with well-established governmental rules and systems.”
Procedural Posture
- SOR issuedNov 27, 2015
- Answer filedFeb 1, 2016
- Hearing heldJun 22, 2016
- Decision dateAug 2, 2016
Cite For
- Failure to File Tax Returns as a Disqualifying Condition Under Guideline F
- Inability to Demonstrate Financial Responsibility as a Basis for Security Clearance Denial
- The Importance of Timely Filing Tax Returns in Security Clearance Evaluations