Summary
A 43-year-old federal contracting applicant was denied a security clearance under Guideline F (Financial Considerations) due to unresolved tax liabilities from 2005. The Statement of Reasons cited two primary allegations: a state tax lien from 2010 for $10,106 related to 2005 taxes, and an outstanding federal tax debt to the IRS for $50,381, also from 2005.
Disqualifying conditions F.1.a, F.1.b, F.1.c, and F.1.f were raised. While the applicant engaged in financial counseling and made efforts to settle state tax debts, mitigating conditions F.2.b, F.2.d, and F.2.e were applied.
Ultimately, the clearance was denied because the applicant failed to timely pay his 2005 federal and state income taxes and did not provide sufficient evidence of resolving his federal tax obligations. These financial issues raised concerns about his reliability and trustworthiness.
Why the Applicant Was Denied
- The applicant failed to timely pay 2005 Federal and state income taxes.
- The applicant did not provide sufficient evidence of resolving his federal tax obligations.
- The applicant's financial issues raised questions about his reliability and trustworthiness.
Conditions Referenced
- F.1.araisedInability to Satisfy Debts
- F.1.braisedUnwillingness to Satisfy Debts Regardless of the Ability to Do So
- F.1.craisedA History of Not Meeting Financial Obligations
- F.1.fraisedFailure 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
- F.2.bappliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
- F.2.dappliedThe Individual Initiated and Is Adhering to a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
- F.2.eappliedThe Individual Has a Reasonable Basis to Dispute the Legitimacy of the Past-due Debt
Key Rule Quoted
“Failure 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.”
Procedural Posture
- SOR issuedJun 8, 2016
- Answer filedJun 24, 2016Applicant elected to have the case decided on the written record.
- Hearing held—No hearing; decided on written record.
- Decision dateOct 12, 2017
Cite For
- Failure to Mitigate Financial Obligations Under Guideline F
- Impact of Unresolved Tax Liabilities on Security Clearance Eligibility
- Consideration of the Whole-person Concept in Financial Cases