Summary
The applicant, a 33-year-old cable installer for a defense contractor, faced security clearance denial under Guideline F due to significant financial issues, including delinquent debts and failure to timely file tax returns. Despite some efforts to address his debts, the judge found insufficient evidence of financial stability or responsible management of his obligations, leading to the conclusion that granting a clearance was not consistent with national interest.
Under Guideline F (Financial Considerations), the Statement of Reasons alleged the following: an automobile loan account with a high credit of $15,489 that was $7,977 past-due and for which $8,031 was charged off in August 2012 (1.a). six student loan accounts with varying high credits ($4,000, $4,000, $4,500, $3,500, $3,500, and $2,625), unpaid balances ($4,595, $5,166, $4,783, $4,047, $4,047, and $3,036), and past-due balances ($415, $330, $433, $259, $259, and $194) that fell into a default status before Applicant was able to rehabilitate them (1.b). seven tickets from various municipalities over a multi-year period (2010 through 2014) for parking, speeding, or red light violations in the amounts of $300, $100, $100, $100, $85, $85, and $55 (1.h). a medical account with an unpaid balance of $83 (1.n). federal and state income tax returns for the tax years 2011, 2012, and 2013 that were allegedly not timely filed (1.o). not timely filed his federal income tax return for 2011 or his state income tax return for 2013 (1.p).
The judge denied the clearance. The government raised disqualifying conditions AG ¶ 19(a), AG ¶ 19(c), AG ¶ 19(g). The judge applied mitigating conditions AG ¶ 20(b), AG ¶ 20(d), AG ¶ 20(a), AG ¶ 20(c). The decision turned on the following: The applicant failed to timely file federal and state income tax returns for multiple years; The applicant had numerous delinquent debts totaling $10,775, with insufficient evidence of resolution or financial stability; The applicant's financial difficulties were ongoing and not adequately addressed, raising concerns about reliability and judgment.
Why the Applicant Was Denied
- The applicant failed to timely file federal and state income tax returns for multiple years.
- The applicant had numerous delinquent debts totaling $10,775, with insufficient evidence of resolution or financial stability.
- The applicant's financial difficulties were ongoing and not adequately addressed, raising concerns about reliability and judgment.
Conditions Referenced
- AG ¶ 19(a)raisedInability or Unwillingness to Satisfy Debts
- AG ¶ 19(c)raisedA History of Not Meeting Financial Obligations
- AG ¶ 19(g)raisedFailure to File Annual Federal, State, or Local Income Tax Returns as Required
- AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
- AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
- AG ¶ 20(a)rejectedBehavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to RecurThe applicant's financial difficulties were recent and ongoing.
- AG ¶ 20(c)rejectedEvidence of Financial Counseling or That the Problem Is Being Resolved or Is Under ControlNo evidence of financial counseling or effective management of finances was presented.
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 issuedAug 21, 2015
- Answer filedMar 11, 2016Applicant elected to have the case decided on the written record.
- Hearing held—No hearing; decision based on written record.
- Decision dateApr 10, 2017
Cite For
- Denial of Security Clearance Due to Unresolved Financial Obligations
- Impact of Tax Compliance on Security Clearance Eligibility
- Evaluation of Financial Responsibility Under Guideline F