Summary
A 54-year-old senior assembler for a federal contractor was denied a security clearance under Guideline F, Financial Considerations. The denial stemmed from a long history of financial problems, including multiple bankruptcies and significant tax delinquencies. Disqualifying conditions were raised under AG ¶ 19(a), AG ¶ 19(c), and AG ¶ 19(f).
Specifically, the applicant failed to file federal and state income tax returns for several years, resulting in significant back taxes owed to the IRS. While one charged-off account of $116 was paid in full, the applicant did not demonstrate adequate steps to resolve her broader tax issues or communicate effectively with tax authorities.
Despite the application of mitigating conditions AG ¶ 20(b), AG ¶ 20(d), and AG ¶ 20(g), the judge found insufficient evidence to mitigate the security concerns arising from her financial irresponsibility, particularly regarding the unresolved tax obligations. Consequently, the security clearance was denied.
Why the Applicant Was Denied
- The applicant has a long-standing history of financial problems, including multiple bankruptcies and delinquent accounts.
- She failed to file federal and state income tax returns for several years and owes significant back taxes to the IRS.
- The applicant did not take adequate steps to resolve her tax issues or communicate with tax authorities.
Conditions Referenced
- AG ¶ 19(a)raisedInability to Satisfy Debts
- 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
- AG ¶ 20(b)rejectedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s ControlThe applicant attributed her financial issues to marital troubles but did not demonstrate that these conditions were beyond her control.
- AG ¶ 20(d)rejectedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsWhile the applicant resolved some accounts, her failure to address tax obligations undermined her claims of good faith.
- AG ¶ 20(g)rejectedThe Individual Has Made Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed and Is in Compliance with Those ArrangementsThe applicant had not made arrangements with tax authorities regarding her back taxes.
Key Rule Quoted
“The failure to timely file tax returns and pay tax when due bears close examination and is a matter of serious concern to the federal government.”
Procedural Posture
- SOR issuedNov 14, 2016
- Answer filedDec 12, 2016
- Hearing heldApr 25, 2017
- Decision dateJan 10, 2018
Cite For
- Financial Irresponsibility as a Disqualifying Factor Under Guideline F
- The Importance of Timely Tax Compliance in Security Clearance Determinations
- The Burden of Proof on the Applicant to Mitigate Financial Concerns