ISCR Case 15-04353.h1

Case Headnote

ISCR Case No. 15-04353.h1

deniedJan 8, 2018· Hon. Marc E. Curry· hearing

Summary

A 45-year-old physicist was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from significant outstanding tax debt and other financial delinquencies, despite the applicant not falsifying his security clearance application.

Specific financial issues included a $1,472 delinquent mortgage payment from 2010-2012, which was satisfied in August 2016. An $8,472 student loan account became delinquent in June 2014; the applicant began consolidating his student loans in January 2016 and made monthly payments between $1,500 and $1,793 from August 2016 until placing them in deferment upon enrolling in graduate school. The most substantial issue was an approximately $32,000 income tax debt to the IRS for 2013, incurred after withdrawing $93,000 from an IRA without setting aside funds for taxes. The applicant negotiated an installment agreement in January 2015, making payments between $498 and $550 monthly until November 2015, then re-negotiated in November 2016 to make $650 monthly payments.

The security clearance was denied because the applicant's significant outstanding tax debt remained largely unaddressed, and his overall financial delinquencies raised concerns about his reliability and trustworthiness. While some positive steps were taken to manage his finances, the overall financial situation was deemed unresolved.

Why the Applicant Was Denied

The applicant has significant outstanding tax debt totaling approximately $32,000, which he has not fully addressed.
The applicant's financial delinquencies raise concerns about his reliability and trustworthiness.
Despite some positive steps taken to manage his finances, the overall financial situation remains unresolved.

Conditions Referenced

Disqualifying

AG ¶ 19(a)raisedInability to Satisfy Debts
AG ¶ 19(b)raisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
AG ¶ 19(f)raisedFailure 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

Mitigating

AG ¶ 20(d)appliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
AG ¶ 20(g)appliedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed and Is in Compliance with Those Arrangements

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedJul 30, 2016
Answer filedSep 6, 2016
Hearing heldJun 29, 2017
Decision dateJan 8, 2018

Cite For

Denial Based on Unresolved Financial Obligations Under Guideline F
No Falsification of Security Clearance Application Under Guideline E
Consideration of the Whole-person Concept in Security Clearance Decisions

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a–2.b	2 sub-charges — specific text not stated in this decision (for the applicant).	For Applicant		—		—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a–2.b

2 sub-charges — specific text not stated in this decision (for the applicant).

For Applicant

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Subparagraph 1.a, totaling $1,472, is a delinquent mortgage payment, stemming from a period between November 2010 and August 2012 when Applicant was separated from his wife. Applicant acknowledges trouble paying his rent timely while separated from his wife, but thought that he was current when he left the apartment and reconciled with his wife. (GE 2 at 22) He satisfied it in August 2016. (AE J) $1,472	For Applicant	Mortgage or Home Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.b	Subparagraph 1.b, totaling $8,472, is one of Applicant’s student loan accounts. (Tr. 23) It became delinquent in June 2014. (GE 4 at 1) In January 2016, Applicant began the process of consolidating all of his student loans into one account with a principal balance of $164,000. (AE F) He has been making monthly payment ranging between $1,500 and $1,793 per month since August 2016. (AE B) Recently, upon enrolling in graduate school, he placed them in deferment status. (Tr. 17; AE I) $8,472	For Applicant	Student Loan Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full
1.c	Subparagraph 1.c, totaling approximately $32,000, is an income tax debt that Applicant owes the U.S. Internal Revenue Service (IRS) for 2013. Applicant incurred this debt after withdrawing $93,000 from his individual retirement account (IRA) to purchase a condominium, and neglecting to set aside part of the withdrawal into an escrow account. (Tr. 24; GE 2 at 24, 29) Applicant realized that he owed this amount when he began preparing his income tax returns in early 2014, prompting him to file for an extension. By January 2015, Applicant had negotiated an installment agreement. (AE M at 1) Under the plan, he made monthly payments ranging between $498 and $550 monthly. (AE M at 1) He stopped making payments in November 2015, after encountering additional financial problems. (Tr. 40) In November 2016, he re-negotiated the payment agreement and has been making $650 monthly payments since then. (AE M at 1) $32,000	Against Applicant	Tax Unpaid	Unknown	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations (f) failure to file / fraudulent filing of tax returns or unpaid tax	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Subparagraph 1.a, totaling $1,472, is a delinquent mortgage payment, stemming from a period between November 2010 and August 2012 when Applicant was separated from his wife. Applicant acknowledges trouble paying his rent timely while separated from his wife, but thought that he was current when he left the apartment and reconciled with his wife. (GE 2 at 22) He satisfied it in August 2016. (AE J)

$1,472

For Applicant

Mortgage or Home Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(d) good-faith effort to repay or otherwise resolve debts

Documented

Debt Paid in Full

1.b

Subparagraph 1.b, totaling $8,472, is one of Applicant’s student loan accounts. (Tr. 23) It became delinquent in June 2014. (GE 4 at 1) In January 2016, Applicant began the process of consolidating all of his student loans into one account with a principal balance of $164,000. (AE F) He has been making monthly payment ranging between $1,500 and $1,793 per month since August 2016. (AE B) Recently, upon enrolling in graduate school, he placed them in deferment status. (Tr. 17; AE I)

$8,472

For Applicant

Student Loan Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(d) good-faith effort to repay or otherwise resolve debts

Documented

Debt Paid in Full

1.c

Subparagraph 1.c, totaling approximately $32,000, is an income tax debt that Applicant owes the U.S. Internal Revenue Service (IRS) for 2013. Applicant incurred this debt after withdrawing $93,000 from his individual retirement account (IRA) to purchase a condominium, and neglecting to set aside part of the withdrawal into an escrow account. (Tr. 24; GE 2 at 24, 29) Applicant realized that he owed this amount when he began preparing his income tax returns in early 2014, prompting him to file for an extension. By January 2015, Applicant had negotiated an installment agreement. (AE M at 1) Under the plan, he made monthly payments ranging between $498 and $550 monthly. (AE M at 1) He stopped making payments in November 2015, after encountering additional financial problems. (Tr. 40) In November 2016, he re-negotiated the payment agreement and has been making $650 monthly payments since then. (AE M at 1)

$32,000

Against Applicant

Tax Unpaid

Unknown

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

(f) failure to file / fraudulent filing of tax returns or unpaid tax

—

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Case Profile

Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES