Summary
A 56-year-old retired Air Force major was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from a failure to timely file and pay federal and state income taxes from 2008 to 2013, as well as undisclosed financial problems.
The applicant's Statement of Reasons detailed several issues, including the late filing of federal tax returns for six years and unresolved tax liens from State 2, filed between 2007 and 2008. While four tax liens from State 1, filed between 2013 and 2014, were paid and released in September 2015, other debts remained. The applicant paid a $502 debt, a $344 debt, and a $27,576 debt for a repossessed car. However, two delinquent debts of $473 and $472 were unfamiliar to the applicant, who suggested his wife might have opened those accounts without his knowledge.
A key factor in the denial was the applicant's failure to disclose numerous financial problems in the security clearance application, despite denying any deliberate omission. The judge found that the applicant's financial mismanagement and lack of candor during the process raised significant unmitigated security concerns, citing a lack of credible evidence of financial counseling or responsible financial management.
Why the Applicant Was Denied
- Failed to timely file and pay federal and state income taxes for multiple years.
- Accumulated unresolved delinquent debts and did not disclose financial problems in the security clearance application.
- Lack of credible evidence of financial counseling or responsible management of finances.
Conditions Referenced
- F.2.braisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
- F.2.craisedA History of Not Meeting Financial Obligations
- F.2.fraisedFailure to File or Fraudulently Filing Annual Federal, State, or Local Income Tax Returns or Failure to Pay Annual Federal, State, or Local Income Tax as Required
- E.2.araisedDeliberate Omission, Concealment, or Falsification of Relevant Facts
- F.3.arejectedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to RecurThe applicant's financial problems have been ongoing since 2008.
- F.3.brejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe applicant's failure to file taxes was within his control.
- F.3.crejectedThe Individual Has Received or Is Receiving Financial CounselingThe applicant did not provide evidence of financial counseling.
- F.3.dappliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue CreditorsThe applicant made some payments on debts but did not establish a sufficient track record.
- F.3.grejectedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount OwedThe applicant's tax issues remain unresolved and will continue until 2024.
- E.3.arejectedPrompt, Good-faith Efforts to Correct the OmissionThe applicant did not make prompt efforts to correct omissions.
- E.3.crejectedThe Offense Is so Minor or Infrequent That It Is Unlikely to RecurThe applicant's omissions were significant and not minor.
Key Rule Quoted
“Failure to file tax returns suggests that an applicant has a problem with complying with well-established government rules and systems.”
Procedural Posture
- SOR issuedApr 24, 2016
- Answer filedMay 21, 2016Applicant elected to have the case decided on the written record.
- Hearing held—No hearing; decided on the written record.
- Decision dateOct 24, 2017
Cite For
- Denial of Security Clearance Due to Financial Mismanagement Under Guideline F
- Lack of Candor in Security Clearance Application Under Guideline E
- Failure to Mitigate Ongoing Tax Issues and Delinquent Debts