Summary
A 64-year-old retired Department of Defense employee and current federal contractor was granted a security clearance despite initial concerns under Guideline F (Financial Considerations). The Statement of Reasons alleged that the applicant failed to file federal and state income tax returns for tax years 2009 through 2013 when due, and did not pay 2014 property taxes when due. These issues raised disqualifying conditions related to financial irresponsibility.
However, the applicant successfully mitigated these concerns. He demonstrated that the delays in filing tax returns were largely due to circumstances beyond his control, specifically his wife's cancer diagnosis and complications arising from eminent domain proceedings. The applicant took proactive steps to resolve these issues, including hiring a Certified Public Accountant to file all overdue returns.
The judge found that the applicant's current financial situation is now under control, with no outstanding tax obligations. The mitigating conditions applied included evidence that the financial problems were not recent, were due to circumstances beyond the applicant's control, and that the applicant had initiated a good-faith effort to resolve the debts. Consequently, the security clearance was granted.
Why the Applicant Prevailed
- The applicant demonstrated that the overdue tax returns were due to circumstances largely beyond his control.
- He took proactive steps to resolve his tax issues by hiring a CPA and filing overdue returns.
- The applicant's current financial situation is under control, with no outstanding tax obligations.
Conditions Referenced
- AG ¶ 19(c)raisedHistory of Not Meeting Financial Obligations
- AG ¶ 19(f)raisedFailure to File or Fraudulently Filing Annual Federal, State, or Local Income Tax Returns
- AG ¶ 20(a)appliedBehavior Happened so Long Ago or Occurred Under Such Circumstances That It Is Unlikely to Recur
- AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
- AG ¶ 20(c)appliedReceived Financial Counseling From a Legitimate and Credible Source
- AG ¶ 20(d)appliedInitiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors
- AG ¶ 20(g)appliedMade Arrangements with the Appropriate Tax Authority to File or Pay the Amount Owed
Key Rule Quoted
“An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds.”
Procedural Posture
- SOR issuedApr 7, 2016
- Answer filed—
- Hearing heldJul 13, 2017Hearing rescheduled from May 18, 2017.
- Decision dateSep 29, 2017
Cite For
- Mitigating Conditions Under Guideline F for Financial Issues Due to Personal Circumstances
- Importance of Proactive Financial Management in Security Clearance Cases
- Consideration of Personal Hardships in Evaluating Financial Responsibility