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ISCR Case 15-08905.h1 — CASE

ISCR Case 15-08905.h1denied

Case Headnote

ISCR Case No. 15-08905.h1

deniedOct 31, 2017· Hon. Roger C. Wesley· hearing

Summary

A 62-year-old senior assurance manager for a defense contractor was denied a security clearance under Guideline F, Financial Considerations, due to significant financial issues. The Statement of Reasons detailed the applicant's failure to timely file federal tax returns for tax years 2008-2013 and state tax returns for 2006-2011.

Additionally, the applicant was indebted to the Federal Government on a tax lien entered in 2011 for $223,051. He also accumulated 31 delinquent consumer debts exceeding $105,000 and accrued a delinquent mortgage debt of $124,234 on a loan balance of $432,375.

The denial was based on the applicant's failure to timely file multiple federal and state tax returns, the accumulation of a substantial federal tax lien and numerous delinquent consumer debts, and the lack of a concrete plan to address his remaining delinquent obligations. The judge determined that the applicant did not sufficiently mitigate the security concerns related to his financial irresponsibility.

Why the Applicant Was Denied

The applicant failed to timely file federal tax returns for multiple years and state tax returns for several years.
The applicant accumulated a federal tax lien of $223,051 and 31 delinquent consumer debts exceeding $105,000.
The applicant did not provide a concrete plan for addressing his remaining delinquent debts.

Conditions Referenced

Disqualifying

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

Key Rule Quoted

“Financial stability in a person cleared to protect privacy information is required precisely to inspire trust and confidence in the holder of a security clearance that entitles him to access classified information.”

Procedural Posture

SOR issuedJun 13, 2016
Answer filedAug 8, 2016
Hearing heldApr 27, 2017
Decision dateOct 31, 2017

Cite For

Failure to Mitigate Financial Concerns Under Guideline F
Impact of Unresolved Debts on Security Clearance Eligibility
Importance of Timely Tax Filings in Security Clearance Determinations

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

Standardized Decision Profile

SEAD-4 Guideline F · descriptive summary of a decided case

Posture: Decision on RecordDecided: denied

The judge found multiple financial concerns against the applicant, including failure to file tax returns, a significant federal tax lien, and numerous delinquent consumer debts. Ultimately, the applicant's financial issues were deemed unresolved, leading to the denial of his security clearance.

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	failed to timely file federal tax returns for tax years 2008-2013, as required	Against Applicant	Tax Filing Failure	Admitted	—	—	—
1.b	failed to timely file state tax returns for tax years 2006-2011	Against Applicant	Tax Filing Failure	Admitted	—	—	—
1.c	is indebted to the Federal Government on a tax lien entered in 2011 for $223,051 $223,051	Against Applicant	Tax Unpaid	Admitted	—	—	—
1.d	accumulated 31 delinquent consumer debts exceeding $105,000 $105,000	Against Applicant	Unspecified Financial	Admitted	—	—	—
1.e	accrued a delinquent mortgage debt of $124,234 on a $432,375 loan balance $124,234	Against Applicant	Mortgage or Home Loan Debt	Admitted	—	—	—
1.f–1.ii	30 sub-charges — specific text not stated in this decision (19 against, 11 for the applicant). (low confidence)	Mixed			—	—	—

Descriptive standardized rendering of a decided public case (Guideline F). The verbatim source decision is shown in full below.

Full decision

The complete, official text — footnotes and signatures included — is in the original PDF.

Decision text, by section

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) ISCR Case No. 15-08905 ------------------------------------ ) ) ) ) Applicant for Security Clearance

For Government: Robert Blazewick, Esq., Department Counsel For Applicant: Gregory D. McCormack, Esq. 10/31/2017 _____________

STATEMENT OF CASE

______________

WESLEY, Roger C., Administrative Judge:

Based upon a review of the pleadings, exhibits, and testimony, I conclude that Applicant did not mitigate the security concerns regarding his financial considerations. Eligibility for access to classified information is denied.

On June 13, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued a Statement of Reasons (SOR) detailing reasons why DOD adjudicators could not make the affirmative determination of eligibility for a security clearance, and recommended referral to an administrative judge to determine whether a security clearance should be granted, continued, denied, or revoked. The action was taken under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information Within Industry (February 20, 1960), as amended; DoD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the Adjudicative Guidelines (AGs) implemented by DOD on September 1, 2006. Security Executive Agent Directive 4, National Security Adjudicative Guidelines (SEAD 4), dated December 10, 2016, superceded and replaced the September 2006 adjudicative guidelines (AGs). They apply to all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position. The new guidelines apply to all adjudicative decisions on or after June 8, 2017. Procedures for administrative due process for contractor personnel continue to be governed by DOD Directive 5220.6, subject to the updated substantive changes in the AGs. Application of the AGs that were in effect as of the issuance of the SOR would not change the decision in this case.

Applicant responded to the SOR on August 8, 2016, and requested a hearing. The case was assigned to me on March 2, 2017, and scheduled for hearing on April 27, 2017. The Government’s case consisted of four exhibits (GEs 1-4). Applicant relied on one witness (himself) and four exhibits with sub-parts. The transcript (Tr. ) was received on May 8, 2017.

Procedural Issues

Before the close of the hearing, Applicant requested the record be kept open to permit him the opportunity to provide updates of his federal and state tax status. For good cause shown, Applicant was granted 30 days to supplement the record. Department Counsel was afforded seven days to respond. Within the time permitted, Applicant submitted a cover letter with attached timely filed federal and state tax returns for tax year 2016 and certified receipts of his filed state tax returns for tax years 2007-2011. Applicant’s submissions were admitted without objection as AEs E-F.

Summary of Pleadings

Under Guideline F, Applicant allegedly (a) failed to timely file federal tax returns for tax years 2008-2013, as required, (b) failed to timely file state tax returns for tax years 2006-2011; (c) is indebted to the Federal Government on a tax lien entered in 2011 for $223,051; (d) accumulated 31 delinquent consumer debts exceeding $105,000; and (e) accrued a delinquent mortgage debt of $124,234 on a $432,375 loan balance.

In his response to the SOR, Applicant admitted all of the listed SOR allegations (SOR ¶¶ 1.a-1.ii) with explanations. He claimed he filed his federal tax returns for the years in issue. He claimed he entered into an agreement with the Internal Revenue Service (IRS) for repayment of the SOR-covered federal tax debts (SOR ¶ 1.c). Addressing his consumer debts, Applicant claimed he entered into payment agreements with SOR creditors of debts covered by ¶¶ 1.c,1.e-1.f, 1.l, and 1.z. Further, he claimed he paid the debts owed to creditors 1.kand 1.s-1.y.

FINDINGS OF FACT

Applicant is a 62-year-old senior assurance manager for a defense contractor who seeks a security clearance. The allegations covered in the SOR and admitted by Applicant are incorporated and adopted as relevant and material findings. Additional findings follow.

Background

Applicant married in December 1977 and divorced spouse one in April 1981. (GEs 1-2) He has one adult child from this marriage and two adult daughters from prior relationships. (GEs 1-2) Applicant remarried in June 1984 and divorced in April 1985. (GE 1; Tr. 21-22) He remarried again in May 1988 and divorced in March 1990 (GE 1) Applicant remarried for his fourth marriage in July 1990 and divorced in October 1990. And Applicant remarried for his fifth marriage in April 1994 and divorced in March 2001. (GE 1). He is currently single. (Tr. 20) Both of Applicant’s parents are deceased. (GE 1; Tr. 18-19)

Applicant earned a high school diploma and reported three years of post-high school education credits. (GEs 1-2; Tr. 23) He enlisted in the Air Force Inactive Reserve in October 1972 and served six months of active duty. (GE 1) He received an honorable discharge in February 1973. In February 1973, Applicant enlisted in the Air Force, served four years of active duty, and received an honorable discharge in February 1977. (GEs 1- 2) In 1978, he enlisted in the Army and served 18 years of active duty as a military policeman and investigator before receiving an honorable discharge in August 1994. (GE 1; Tr. 24-25) Throughout his Air Force and Army service, he maintained security clearances. (GE 1; Tr. 25)

Since March 2013, Applicant has been employed by his current employer. (GE 1) Between February 2014 and March 2014, he was employed as a security agent for a non- DOD contractor. Applicant reported unemployment between December 2012 and February 2013, self-employment as an insurance agent between August 2012 and December 2012, unemployment between December 2011 and August 2012, and unemployment between September 2010 and May 2011. (GE 1) From May 1998 to September 2010, Applicant was employed as a consultant for non-DOD contractors. (GEs 1-2)

Applicant receives disability benefits based on a neurological condition he contracted in 2008. (Tr. 27-28) Due to complications with his extremities attributable to his neuropathy condition associated with his type II diabetes diagnosis, he underwent gastric bi-pass surgery in November 2016. (Tr. 29-30) And to relieve pressure on his neck, he underwent spinal surgery in May 2012, for which he was hospitalized for over a week, and readmitted on several occasions thereafter to address a blood poisoning infection. (Tr. 30-32)

Applicant’s finances

Records confirm that Applicant failed to timely file his federal income tax returns for tax years 2008-2013, as required. (GEs 1-2; Tr. 37-38) Also, he failed to timely file his state income tax returns for tax years 2007-2011. (GEs 1-4) Applicant documented his filing of his federal returns for the covered years (2008-2013) in issue in March and April 2016. (AE D at 57-68; Tr. 39-41) He also documented his timely filing of his 2006 state tax return in May 2007 and his federal and state tax returns for tax year 2016. (AE D at 69-72 and AE F; Tr. 42). And he provided documentation of his preparation of his state tax returns for tax years 2007-2011 and his filing of the returns with the appropriate state taxing authority in May 2017. (AE D at 69-82 and AE E; Tr. 44-46)

Because he was told by state tax authority representatives that he did not need to file back state returns for the years in issue until he received a tax bill, he awaited advice on what he owes the state, if anything, and whether he still neededs to file tax returns for tax years 2007-2011. (Tr. 44-45) In April 2017, he was provided a state tax summary documenting a beginning balance of $12,819 owed the state for tax years 2007-2011, accrued interest of $1,757, and withheld payments of $14,576, leaving a current balance owing of zero. (AE D, at 71)

Applicant’s filed state tax returns for tax years 2007-2011 (AEs D-E) report aggregate taxes due the state for these past years of $31,823. These reported figures do not include calculated accrued interest for late payments and any penalties for late filing. So, at this time, it is unclear how much he will owe the state in back taxes, accrued interest, and assessed penalties for late filing. And because he did not provide any evidence of a installment agreement with the state taxing authority, filing and payment approvals by the taxing authority cannot be determined or evaluated.

How much Applicant currently owes in state taxes based on his April 2017 state tax return filings for tax years 2007-2011 is unclear and unresolved. Applicant is committed to working out a payment plan with the state taxing authority and awaits instructions from the state’s taxing authority. (Tr. 45-46) To date, though, he has no payment plan in place and no reliable assurances of whether his back state tax returns are required to be filed.

Records document that Applicant incurred a federal tax lien for 2011 covering federal taxes of $223,051 for tax years 2008-2013. (GEs 1-5) Applicant attributed his untimely tax filing and late paying failures to incurred medical debts associated with taking care of his father and managing medical issues involved with his own bi-pass surgical procedures in May 2012. (Tr. 39-40) With all of his medical debts associated with his medical issues, Applicant did not have the $40,000 available to fund an IRS-approved payment plan. (Tr. 40)

In May 2016, Applicant entered into an installment agreement with the IRS with monthly payment terms set at $1,898 a month. (AE D at 48) Between May 2016 and March 2017, Applicant retired much of the combined taxes owed for tax years 2008-2013. In the revised installment agreement with the IRS he executed in March 2017, the IRS calculated the aggregate amount owed to be $72,446 and revised his monthly payment to $1,500. (AE D at 55; Tr. 36-41) Applicant assured that he has continued to make his monthly payments to the IRS in compliance with his revised installment agreement. (Tr. 37, 41) His assurances, while not documented, are credible and are accepted. He owes no back taxes on his late-filed tax returns.

In December 2011, Applicant’s home was foreclosed following months of the loan being in delinquent status. (GEs 2-4) At the time, he owed $109,000 on the first mortgage loan balance of $432,375. (GEs 1-5) Before selling the home at public auction to recover its loan investment, the lender sold the loan to a loan servicing agency in December 2011. (GEs 3-4; Tr. 57-58).

Asked by the loan servicing agency if he wanted to repay the past-due mortgage payments, which then approximated $124,234, and move back into the home, Applicant declined. (GE 2; Tr. 58-59) To date, he has received no notice that his home has been foreclosed or demands for payment on the loan balance by either the original lender or its assignee. (GE 2; Tr. 57-58) Applicant’s most recent credit report of April 2017 confirmed that the original lender reclaimed the collateral leaving no reported deficiency balance for either the lender or its assignee (SOR creditor ¶ 1.l). (AE D, at 87; Tr. 59) Accordingly, SOR debt ¶ 1.lis resolved favorably to Applicant.

Besides his accrued tax and mortgage debts, Applicant accumulated 31 delinquent consumer debts exceeding $105,000. (GEs 1-5) He documented addressing and resolving a number of these debts: SOR debts ¶¶ 1.e ($1,687) and 1.f ($1,873) with partial payments between April 2016 and March 2017 totaling $1,312 (AE D, at 83); 1.k ($361) with a modest partial payoff of $16 (AE D at 85; Tr. 56); 1..l ($124,234 with lender reclaiming of its foreclosed security);1.s-1.y (small medical debts totaling $348) with payments settling the balance owed (AE D, at 88-95; Tr. 66-67); 1.z ($16,777) with monthly payments of $464 reducing the remaining balance to $10,214 (AE D, at 100-101; Tr. 68-69); and 1.bb ($3,119) with monthly payments reducing the balance owed to $1,319. (AE D, at 103-106; Tr. 74-76) Applicant’s documented consumer debt payments approximate $12,327. (AE D)

Applicant’s remaining delinquent debts covered by the SOR consist of delinquent balances on SOR debts ¶¶ 1.d ($468); 1.f ($1,873); 1.g ($7,044); 1.h ($6,932); 1.i ($4,018); 1.j ($2,919); 1.m ($13,787); 1.n ($10,841); 1.o ($8,083 on a repossessed motorcycle)); 1.p ($2,119); 1.q ($19,568 on a repossessed boat); 1.r ($10,802); 1.aa ($9,246); 1.cc ($1,625): 1.dd ($1,050); 1.ee ($172); 1.ff ($126); 1.gg ($84); 1.hh ($40); and 1.ii ($360). These unpaid and unresolved debts exceed $93,000. (GEs 1-4 and AE D; Tr. 57-84, 88-92)

As a percentage of Applicant’s combined list of unpaid delinquent consumer debts, Applicant’s combined payments represent approximately 12 per cent of the total of listed consumer delinquent debts in the SOR. Although none of these remaining debts have been taken to judgment, they have not been addressed by Applicant. Further, Applicant provided no concrete plans for addressing these remaining delinquent debts in the foreseeable. Applicant currently grosses $12,951 a month according to his earnings statement. (AE D, at 47) He reported monthly expenses of $11,440, which leaves him with a monthly discretionary remainder of $1,511. (AE D, at 47) He maintains a checking account with daily balances ranging from $712 to $5,701. (AE D, at 38-44)

Character references and performance evaluations

Applicant is well-regarded by his present supervisor and current and former co workers and military personnel who have worked closely with him. (AE C) Applicant’s supervisor expressed high regard for Applicant’s work performance and team dedication who undertook the challenge of keeping sensitive systems secure. (AE C)

Coworkers credit Applicant with good character, strong work ethics, integrity, strong moral values, dependability, and devotion to his family. They characterize him as honest and forthright in all of his professional relationships. (AE C) Former coworkers describe Applicant as dedicated to protecting security, maintaining strict boundaries of confidentiality, and exhibiting good judgment. (AE C) Above all, these former coworkers expressed their assurances that Applicant can be trusted with classified and sensitive information. (AE C)

Applicant’s performance evaluations for 2017 reflect excellent job performance in support of his employer’s important missions. (AE B) He is credited with exhibiting an extremely high work ethic, a level of knowledge that contributes to his company’s success, and a level of detail of information he provides that is rated “beyond excellent.” (AE B)

POLICIES

The SEAD 4, App. A lists guidelines to be used by administrative judges in the decision-making process covering security clearance cases. These guidelines take into account factors that could create a potential conflict of interest for the individual applicant, as well as considerations that could affect the individual’s reliability, trustworthiness, and ability to protect classified information. These guidelines include conditions that could raise a security concern and may be disqualifying (disqualifying conditions), if any, and many of the conditions that could mitigate security concerns.

These guidelines must be considered before deciding whether or not a security clearance should be granted, continued, or denied. The guidelines do not require administrative judges to place exclusive reliance on the enumerated disqualifying and mitigating conditions in the guidelines in arriving at a decision. Each of the guidelines is to be evaluated in the context of the whole person in accordance with App. A. AG ¶ 2(c).

In addition to the relevant AGs, administrative judges must take into account the pertinent considerations for assessing extenuation and mitigation set forth in App. A, AG ¶ 2(d) of the AGs, which are intended to assist the judges in reaching a fair and impartial commonsense decision based upon a careful consideration of the pertinent guidelines within the context of the whole person.

The adjudicative process is designed to examine a sufficient period of an applicant’s life to enable predictive judgments to be made about whether the applicant is an acceptable security risk. The following App A, AG ¶ 2(d) factors are pertinent: (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral chances; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence.

Viewing the issues raised and evidence as a whole, the following individual guidelines are pertinent in this case:

Financial Considerations

The Concern: Failure or inability to live within one’s means, satisfy debts and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse of dependence. An individual who is financially overextended is at greater risk of having to engage in illegal acts or otherwise questionable acts to generate funds. . . . AG ¶ 18.

Burden of Proof

By virtue of the principles and policies framed by the AGs, a decision to grant or continue an applicant's security clearance may be made only upon a threshold finding that to do so is clearly consistent with the national interest. Because the Directive requires administrative judges to make a commonsense appraisal of the evidence accumulated in the record, the ultimate determination of an applicant's eligibility for a security clearance depends, in large part, on the relevance and materiality of that evidence. See United States, v. Gaudin, 515 U.S. 506, 509-511 (1995).

As with all adversarial proceedings, the judge may draw only those inferences which have a reasonable and logical basis from the evidence of record. Conversely, the judge cannot draw factual inferences that are grounded on speculation or conjecture. The Government's initial burden is twofold: (1) it must prove by substantial evidence any controverted facts alleged in the SOR, and (2) it must demonstrate that the facts proven have a material bearing to the applicant's eligibility to obtain or maintain a security clearance. The required materiality showing, however, does not require the Government to affirmatively demonstrate that the applicant has actually mishandled or abused classified information before it can deny or revoke a security clearance. Rather, the judge must consider and weigh the cognizable risks that an applicant may deliberately or inadvertently fail to safeguard classified information.

Once the Government meets its initial burden of proof of establishing admitted or controverted facts, the evidentiary burden shifts to the applicant for the purpose of establishing his or her security worthiness through evidence of refutation, extenuation, or mitigation. Based on the requirement of Exec. Or. 10865 that all security clearances be clearly consistent with the national interest, the applicant has the ultimate burden of demonstrating his or her clearance eligibility. “[S]ecurity-clearance determinations should err, if they must, on the side of denials.” See Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).

ANALYSIS

Security concerns are raised over Applicant’s failure to timely file federal and state tax returns for multiple years and his accrual of delinquent federal taxes and delinquent consumer debts. Applicant’s late filing of his federal and state tax returns, his incurring of delinquent federal taxes, and his accumulation of delinquent consumer debts warrant the application of four of the disqualifying conditions (DC) of the Guidelines: DC ¶¶ 19(a), “inability to satisfy debts”; 19 (b), “unwillingness to satisfy debts regardless of the ability to do so”; 19(c), “a history of not meeting financial obligations”; and 19(f), “failure 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.”

Applicant’s tax and consumer pleading admissions with respect to his filing omissions and accumulation of delinquent federal tax and consumer debts negate the need for any independent proof. See McCormick on Evidence, § 262 (6th ed. 2006). Each of Applicant’s tax-filing failures, delinquent federal tax debts, and consumer debts are fully documented in his credit reports and OPM interview summary and create some judgment issues. See ISCR Case 03-01059 at 3 (App. Bd. Sep. 24, 2004).

Financial stability in a person cleared to protect privacy information is required precisely to inspire trust and confidence in the holder of a security clearance that entitles him to access classified information. While the principal concern of a security clearance holder’s demonstrated financial difficulties is vulnerability to coercion and influence, judgment and trust concerns are implicit in cases involving debt delinquencies.

Historically, the timing of filing tax returns, paying, or otherwise resolving owed federal taxes to the Federal Government in DOHA proceedings is critical to an assessment of an applicant’s trustworthiness, reliability, and good judgment in following rules and guidelines necessary for those seeking access to classified information or to holding a sensitive position. See ISCR Case No. 14-06808 at 3 (App. Bd. Nov. 23, 2016); ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015)

Extenuating circumstances (i.e., recurrent unemployment and personal medical issues) have accounted for some of Applicant’s financial problems with his federal and state taxes and his consumer debts. MC ¶ 20(b), “the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation), and the individual acted responsibly under the circumstances,” partially applies to Applicant’s situation.

To date, Applicant has made some progress in meeting his financial responsibilities. He has since filed all of his federal tax returns for tax years 2008-2013 and has established installment agreements with the IRS and confirmed compliance with the terms of his installment agreements. He provided proof, too, of his late filing of his state tax returns for tax years 2007-2011 and his timely filing of his federal and state tax returns for tax year 2016. Applicant’s probative evidence also included documented payments of a number of SOR-listed consumer debts (11 in all totaling around $12,327) and credit for any loan balance on his first mortgage with SOR creditor ¶ 1.lwho redeemed its security. And he previously made good-faith contacts with state tax authorities in efforts to file his back state returns (tax years 2007-2011) and establish payment plans for any additional state taxes owed beyond those taxes previously withheld and credited to him.

Still, Applicant has not to date provided any evidence of state tax summaries covering additional taxes, interests, and penalties owed, or potentially owed, his state’s taxing authority for tax years 2007-2011. State approvals of Applicant’s late-filed tax returns, tax assessments for the covered years, and payment arrangements for aggregate taxes owed for the tax years in issue, remain undetermined and unresolved.

Further, Applicant has not addressed most of his listed consumer debts, which collectively exceed $93,000. Two of these remaining debts are related to deficiency balances on a repossessed boat (SOR debt ¶ 1.q) and a repossessed motorcycle (SOR debt ¶ 1.o) Considered together, these repossessions reflect discrete examples of living beyond his means. Without any reserves to cover him when faced with difficult periods of unemployment and medical complications, he left himself exposed to increased risks of credit default.

Applicant’s responsible efforts in addressing some of his debts with the limited resources available to him during his recurrent periods of unemployment between 2010 and 2013 entitle him to partial credit with meeting the acting responsibly under the circumstances prong of MC ¶ 20(b). See ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. Nov. 29, 2005).

Applicant’s corrective steps taken to resolve his tax and consumer debts through a combination of past withholding of state taxes by the state taxing authority, installment arrangements with the IRS, mortgage credits and consumer debt payments enable him to avail himself, too, of some of the mitigation benefits of MC ¶ 20(d), “the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts.” And by establishing installment agreements with the IRS and maintaining compliance with the express terms of those agreements, Applicant may avail himself of the benefits of MC ¶ 20(g), “the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.” Assessments of Applicant’s progress in addressing and resolving remaining tax obligations with his state’s taxing authority are premature without more evidence of Applicant compliance with his state’s taxing obligations.

In evaluating Guideline F cases, the Appeal Board has stressed the importance of a “meaningful track record” that includes evidence of actual debt reduction through voluntary payment of debts. ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations omitted) In Applicant’s case, his demonstrated responsible efforts in addressing his SOR-listed federal tax and consumer obligations enable favorable findings and conclusions to be reached with respect to security concerns raised in connection with these concerns.

Whole-person assessment takes account of not only Applicant’s military service and employment contributions to the defense industry, but the Government’s concerns over Applicant’s finances and how he has addressed them with the resources available to him. For sure, Applicant warrants strong praise and appreciation for his many years of military service and contributions to the defense industry. Credit is warranted, too, for Applicant’s efforts in resolving his federal tax filing and payment issues.

More substantial, though, in making a whole-person assessment of Applicant are the financial issues in his profile that raise continued Government concerns over the level of progress he has made to date in addressing his remaining state tax obligations and still unresolved consumer debts. In balance, Applicant has shown insufficient progress to date in addressing his still outstanding state tax issues covering tax years 2007-2011 and his remaining consumer debts covered in the SOR to merit positive overall credit.

Applicant’s contributions to the national defense and the positive impressions he has forged with his current supervisor and current and former coworkers who have worked closely with him are fully noted and promise to serve him well in the future. More time is needed, though, to restore his finances to acceptable levels compatible with security clearance eligibility. See AG ¶ 18.

Taking into account all of the documented facts and circumstances surrounding Applicant’s federal and state tax filing lapses, the installment agreements he has executed with the IRS, and his consumer debt accruals and progress to date, there is not enough probative evidence of financial progress to mitigate financial concerns. Conclusions are warranted that Applicant’s finances are insufficiently stabilized at this time to meet minimum eligibility requirements for holding a security clearance.

FORMAL FINDINGS

In reviewing the allegations of the SOR and ensuing conclusions reached in the context of the findings of fact, conclusions, conditions, and the factors listed above, I make the following formal findings:

GUIDELINE F (FINANCIAL CONSIDERATIONS): AGAINST APPLICANT

Subparagraphs 1.b, 1.d, 1.g-1.j, 1.m-1.r. 1aa, 1.cc-1.ii: Against Applicant

Subparagraphs 1.a, 1.c, 1.e-1.f, 1.k-1.l 1.s-1.z, and 1.bb: For Applicant

CONCLUSION

In light of all the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or continue Applicant’s eligibility to hold a security clearance. Clearance is denied.

Roger C. Wesley Administrative Judge