ISCR Case No. 16-00741.h1

DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: ) ) ) ------------------------------------- ) ADP Case No. 16-00741 ) ) Applicant for Public Trust Position )

For Government: Aubrey De Angelis, Esq., Department Counsel For Applicant: Pro se 09/07/2017 ______________

______________

WESLEY, Roger C., Administrative Judge:

Based upon a review of the pleadings and exhibits, I conclude that Applicant mitigated trust concerns regarding her finances. Eligibility for holding a public trust position is granted.

History of the Case

On August 31, 2016, the Department of Defense (DOD) Consolidated Adjudication Facility (CAF) issued a Statement of Reasons (SOR) detailing reasons why DOD adjudicators could not make the preliminary affirmative determination whether to grant eligibility for a public trust position, and recommended referral to an administrative judge to determine whether eligibility to hold a public trust position 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). The new Guidelines replaced the 2006 AGs placed in force on September 6, 2006, and are controlling for decisions issued on or after June 8, 2017.1

Applicant responded to the SOR on October 31, 2016, and requested a hearing. This case was assigned to me on December 21, 2016. The case was scheduled for hearing on April 4, 2017. A hearing was held on the scheduled date for the purpose of considering whether it would be clearly consistent with the national security interest to grant, continue, deny, or revoke Applicant’s application for eligibility to hold a public trust position. At the hearing, the Government’s case consisted of five exhibits (GEs 1- 5); Applicant relied on three witnesses (including herself) and no exhibits. The transcript was received on April 13, 2017.

Procedural Issues

Before the closing of the hearing, Applicant requested the record be kept open to permit her the opportunity to supplement the record with Chapter 7 bankruptcy petition schedules and federal and state taxes owed. For good cause shown, Applicant was granted seven days to supplement the record. Department Counsel was afforded seven days to respond.

Within the time permitted, Applicant supplemented the record with federal tax transcripts covering 2013-2016 tax returns, taxes, and tax credits, Chapter 7 schedules, terms, state tax transcripts covering 2012-2016 tax payments, and an installment agreement confirmation from the Internal Revenue Service (IRS) setting monthly payment terms. Applicant’s submissions were admitted without objection as AEs F-I.

Summary of Pleadings

Under Guideline F, Applicant allegedly (a) failed to timely file federal and state income tax returns for tax years 2013 and 2014; (b) incurred delinquent federal taxes for tax years 2008 ($3,348), 2009 ($195), 2010 ($398), 2011 ($4,557), and 2012 ($3,519); (c) accumulated delinquent consumer debts exceeding $10,000; and (d) petitioned for Chapter 7 bankruptcy relief in February 2006 (discharged in May 2006). Applicant’s alleged delinquent tax and consumer debts remain outstanding.

In her response to the SOR, Applicant admitted most of the alleged debts with explanations (denying only the allegations covered by SOR debt ¶ 1.n for lack of

1 Effective June 8, 2017, by Directive 4 of the Security Executive Agent Directive (SEAD 4), dated familiarity with the alleged debt). She claimed that SOR alleged debts ¶¶ 1.g-1.j and 1.m (all high-interest credit card debts) no longer appear on her credit report. She claimed that her filed Chapter 7 bankruptcy petition and discharge no longer appear on her credit report. She also claimed she is making restitution payments to the IRS, which has already taken $5,000 from her to cover back taxes owed.

Applicant claimed generally in her response that she is currently working with her attorney to determine the best course of action for her to take to resolve her outstanding debts. She claimed that she has been the primary earner in her household for the past 22 years, and that her husband has had a series of health issues and is not working.

Applicant is a 47-year-old call center supervisor for a defense health contractor who seeks eligibility to hold a public trust position. The allegations covered in the SOR and admitted by Applicant are adopted as relevant and material findings. Additional findings follow.

Background

Applicant married in August 1995 and has two adult children (ages 22 and 21), who currently reside with her and her husband. (GEs 1-2; Tr. 46, 57) She reported no post-high school education or military service. Since August 2004 (a period of almost 13 years), Applicant has worked for her current employer. (GEs 1-2; Tr. 43) Her husband has experienced a series of health issues and is not currently working. (Tr. 55) He has been basically a stay-at-home father for their children. (Tr. 57)

Finances

Since the early 2000s, Applicant and her husband have experienced recurrent financial problems, mostly over their over reliance on high-interest credit cards. (GE’s 1- 5; Tr. 39, 47-48) In hopes of improving their credit, they petitioned for Chapter 7 bankruptcy relief in February 2006 and received their discharge in May 2006. (GEs 1–5; Tr. 47) Her 2006 Chapter 7 petition and discharge no longer appear on her credit reports. (GEs 3-5) For a number of years, she has been the sole income provider for her household. (GE 2; Tr. 55)

Facing severe income shortages in 2013 with owed federal income taxes for tax years 2008 ($3,348), 2009 ($195), 2010 ($398); 2011 ($4,457), and 2012 ($3,519), for a running total of $11,917, Applicant failed to cover her assessed federal tax debts for the tax years in issue. Applicant’s timely filing of her federal tax returns for tax years 2008-2012 are not in issue and were presumably filed in a timely way as required by federal law.

Applicant failed to timely file her federal income tax returns for tax years 2013 and 2014. (GEs 3-5) IRS transcripts for tax years document her filing her late federal returns for these tax years in June 2016, two months prior to receiving the SOR. (AE F; Tr. 48) Applicant also documented her filing of her state tax returns for tax years 2012- 2016. (AE H) The April 2017 state transcripts confirm Applicant filings and zero balances for the years in question. While they do not provide filing dates, they do not reveal any filing delinquencies.

Applicant attributed her tax-filing failures to taking too many exemptions in her federal tax returns. (Tr. 49-50) She has since reduced her exemptions and is able to file her federal and state tax returns without risk of penalties. (Tr. 50) She documented her timely filing of her 2015 and 2016 federal tax returns in June 2016 and April 2017, respectively. (AEs B-C) Her post-hearing submissions also included documentation of her timely filing of her state returns for tax years 2013-2014 and confirmation of zero account balances for these state tax years. (AEs D and H; Tr. 49, 53) Her assurances and documentary support are credible, not controverted by any countervailing evidence in the record, and are accepted.

Applicant’s federal tax transcripts for tax years 2014-2016 reveal taxes owed for tax year 2014 in the amount of $5,873 (AE F). Refunds computed for tax years 2015 and 2016 are as follows: tax year 2015 ($2,746) and tax year 2016 ($6,617). (AEs B-C and F) According to the IRS transcript for tax year 2015, Applicant’s credited refund for that year was transferred out to cover back taxes owed for tax year 2012. (AEs E-F) Applicant did not provide any explanations of the IRS’s transfer out actions on her 2015 tax return to confirm, dispute, or amplify the IRS’s reported actions relating to her 2012 and 2015 tax returns. Compare AEs B and F.

Applicant acknowledged and records confirm that she was still indebted to the IRS for delinquent taxes owed for tax years 2008-2012 in an aggregate amount approximating $11,917. (GEs 1-5 and AEs B-C, F, and G) Transcripts for these years do not reveal any IRS reassessments within the previous three years. (AE F) Among Applicant’s post-hearing submissions was a May 2017 confirmation of Applicant’s installment agreement with the IRS covering her taxes owed for tax years 2013 and 2014. (AE I) The IRS’s May 2017 letter confirmed monthly payments of $50 (subject to escalating adjustments in 2018) with payments commencing in June 2017. (AE I) Applicant did not include any advance June payment with her confirming agreement but is otherwise in compliance with the terms of her installment agreement. (AE I)

Between 2006 and 2015, Applicant accumulated delinquent consumer debts exceeding $10,000. (GEs 1-5) These debts are listed in the SOR under ¶¶ 1.g -1.n. After exploring debt consolidation, she and her husband petitioned for Chapter 7 bankruptcy relief in December 2016. (AE G) In her petition, she listed assets totaling $11,385 (consisting of a vehicle and household items), and she claimed an exemption of $5,000. (AE G) She scheduled no preferred claims and scheduled unsecured non- priority claims of $20,691 (inclusive of $11,845 in aggregate claims covering tax years 2008-2012). (AE G)

In her Chapter 7 petition, Applicant certified to completing an on-line course on personal financial management and reported combined net monthly income of $3,849 after adjustments to her reported $8,683 of gross monthly income. (AE G) Applicant received her Chapter 7 bankruptcy discharge in March 2017. (AE E) Because the bankruptcy discharge order did not address Applicant’s listed IRS debts for tax years 2008-2012, their discharge will depend on whether the debts meet federal statutory discharge criteria.

Currently, Applicant no longer uses credit cards and relies on cash for her purchases. (Tr. 39) With a fresh start, she is able to meet her current financial obligations.

Character references

Applicant is well-regarded by her supervisors and colleagues. (AE A; Tr. 30-31, 34-35) They characterize her as trustworthy and reliable with good judgment. None of her colleagues expressed any detailed awareness of the financial issues covered in the SOR. (AE A; Tr. 31, 35) Her call center manager expressed many positive impressions of his working relationship with Applicant. He credited her with generosity and kindness in her treatment of coworkers and considered her “a driving force behind our call center’s morale team.” (AE A)

Coworkers are equally praiseworthy about Applicant’s demonstrated professionalism and work ethic. (AE A) The credited her with being knowledgeable and compassionate with proven traits of trustworthiness, dedication, and reliability. (AE A) A former colleague who is now a supervisor described Applicant as a good teacher with a great understanding of the workplace and the pivotal role her call center plays with the firm’s overall health missions. (AE A)

The new AGs in SEAD 4 for use in contractor cases covered by the process provided by DOD Directive 5220.6 list guidelines to be used by administrative judges in the decision-making process covering DOHA 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 and sensitive [privacy] information. These guidelines include "[c]onditions that could raise a trustworthiness concern [public trust position] and may be disqualifying” (disqualifying conditions), if any, and many of the "[c]onditions that could mitigate [trustworthiness concerns].”

The AGs must be considered before deciding whether or not eligibility to hold a public trust position should be granted, continued, denied, or revoked. 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 AG ¶ 2(a).

In addition to the relevant AGs, administrative judges must take into account the pertinent considerations for assessing extenuation and mitigation set forth in AG ¶ 2(a) 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 public trust risk.

When evaluating an applicant’s conduct, the relevant AGs are to be considered together with whole-person factors. The following AG ¶ 2(d) factors are to be considered along with the guidelines: (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 guideline is pertinent in this case:

Financial Considerations

The Concern: 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 [privacy] or sensitive information. . . An individual who is financially overextended is at greater risk of having to engage in illegal 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 eligibility to hold a public trust position may be made only upon a threshold finding that to do so is clearly consistent with the national security 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 public trust position 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.

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 public trust position eligibility. The required materiality showing, however, does not require the Government to affirmatively demonstrate that the applicant has actually mishandled or abused privacy information before it can deny or revoke eligibility to hold a public trust position. Rather, the judge must consider and weigh the cognizable risks that an applicant may deliberately or inadvertently fail to protect privacy 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 trustworthiness through evidence of refutation, extenuation, or mitigation. Based on the requirement of Exec. Or. 10865 that all [trustworthiness] determinations be clearly consistent with the national interest, the applicant has the ultimate burden of demonstrating his or her trust eligibility. “[T]rustworthiness] determinations should err, if they must, on the side of denials.” See Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).

Trustworthiness concerns are raised over Applicant’s history of failing to timely file federal, tax returns, and allegedly state returns, for tax years 2013 and 2014. Additional trustworthiness concerns are raised over her (a) accrual of delinquent federal taxes for tax years 2008 through 2012; accumulation of delinquent consumer debts; and (c) Chapter 7 bankruptcy petition in February 2006 and ensuing discharge in May 2006.

Jurisdictional issues

Holding a public trust position involves the exercise of important fiducial responsibilities, among which is the expectancy of consistent trust and candor in protecting and guarding personally identifiable information (PII). DOD Manual 5200.02, which incorporated and canceled DOD Regulation 5200.2-R, covers both critical-sensitive and non-critical sensitive national security positions for civilian personnel. See 5200.02, ¶ 4.1a(3)(c)3. Positions designated as Category l and Category II automated data processing positions (ADP) were previously classified as critical-sensitive and non-critical sensitive positions under DOD Regulation 5200.2-R, Personnel Security Program, (Jan. 1987, as amended) (the Regulation), ¶¶ C3.1.2. 1.1.7. Other positions that did not meet ADP criteria were classified as non-sensitive positions under the Regulation.

A memorandum from the Deputy Under Secretary of Defense for Counterintelligence and Security, titled “Adjudication of Trustworthiness Cases,” covering the handling of trustworthiness cases under the Directive was issued on November 19, 2004. This memorandum directed DOHA to continue to utilize DOD Directive 5220.6 in ADP contractor cases for trustworthiness determinations for persons holding sensitive positions (to include those involving ADP I and II positions). However, these Directive Type Memorandums (DTMs) are issued only for time- sensitive policy actions that cannot wait for a Directive of Instruction to be coordinated and published. While DTMs move through the issuance process faster than other types of issuances, they are effective for only 180 days from the date signed, while the other issuances are valid for five years. See DOD Issuances Updated July 2017), www.esd.whs.mil. There are no indications that the November 2004 memorandum covering adjudication of trustworthiness cases was ever extended or renewed. Definitions for critical-sensitive and non-critical sensitive positions provided in 5200.02, ¶ 4.1a (3)(c) contain descriptions similar to those used to define ADP l and II positions under DOD Regulation 5200.2-R. (32 C.F.R. § 154.13 and Part 154, App. J) ADP positions are broken down as follows in 32 C.F.R. § 154.13 and Part 154, App. J): ADP l (critical-sensitive positions covering the direction, design, and planning of computer systems) and ADP II (non-critical-sensitive positions covering the design, operation, and maintenance of computer systems). Considered together, the ADP I and II positions covered in DOD Regulation 5200.2-R refine and explain the same critical-sensitive and non-critical-sensitive positions covered in DOD Manual 5200.02, ¶ 4.1a (3)(c) and are reconcilable as included positions in 5200.02.

So, while ADP trustworthiness positions are not expressly identified in DOD Manual 5200.02, they are implicitly covered as non-critical sensitive positions that require “access to automated systems that contain active duty, guard, or personally identifiable information or information pertaining to Service members that is otherwise protected from disclosure by DOD 5400.11-R. . . “. DOD 5200.02, Sec. 4.1, ¶ 3(c). See DOD Directive 5220.6 ¶¶ D5(d) and D8. By virtue of the implied retention of ADP definitions in DOD Manual 5200.02, ADP cases continue to be covered by the process afforded by DOD 5220.6.

Financial concerns

Applicant’s untimely filing of her 2013 and 2014 federal taxes in February 2016 (five months prior to receiving the SOR); her accrual of delinquent federal tax debts for tax years 2008-2012; her accumulation of delinquent consumer debts; and her petition for Chapter 7 bankruptcy relief and discharge are admitted and well documented. Applicant’s history of tax-filing deficits and delinquencies with her tax and consumer debts that are marked by two Chapter 7 bankruptcy petitions 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 pleading admissions with respect to her late federal tax returns and accrual of delinquent tax and consumer debts covered in the SOR negate the need for any independent proof (see McCormick on Evidence, § 262 (6th ed. 2006)). Each of Applicant’s delinquent federal tax return filings and delinquent tax and consumer debts are fully documented in her credit reports 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 non-critical sensitive position. While the principal concern of a non-critical sensitive position holder’s demonstrated financial difficulties is vulnerability to coercion and influence, judgment and trust concerns are implicit in cases involving debt delinquencies.

While Applicant filed her 2013 and 2014 federal tax returns untimely, she received tax refunds in both cases. Records document that for tax year 2015, she received a refund of $2,746, and for tax year 2016, she received a tax refund of $6,617. Some, but not all, of the refunds were inferentially applied to prior balances still owing for tax years 2008-2012.

In December 2016, five months after receiving the SOR, Applicant petitioned for a second round of Chapter 7 bankruptcy relief. In her petition, she scheduled both federal tax claims covering tax years 2008 through 2012 and the consumer debts listed in the SOR. These listed federal tax debts totaled $11,845 net of any applied refunds from subsequent tax years. Because Applicant’s discharge order did not expressly discharge these tax debts, questions remain whether these scheduled tax debts for tax years 2008-2012 are debts that can be discharged in bankruptcy.

As a general rule, federal tax debts are not dischargeable in bankruptcy. To qualify back federal income taxes for bankruptcy discharge, petitioners must meet the requirements of four IRS established criteria for discharge under Chapter 7 of the Bankruptcy Code. Under the specific time periods set by the Bankruptcy Code for determining whether taxes can be discharged in bankruptcy, a petitioner must first establish the application of three specific time periods (commonly referred to as the 3- 2-240 rules).

First of the 3-2-240 rules is the IRS’s three-year rule which conditions the discharge of federal tax debts in bankruptcy on a showing that the debts in issue became due at least three years before the petitioner filed for bankruptcy. Second is the IRS’s two-year rule under which the petitioner’s income tax returns must have been filed at least two years before she filed her bankruptcy petition. Third is the IRS’s 240-rule requiring that taxes must have been assessed by the IRS at least 240 days before the petitioner filed for bankruptcy, or not assessed at all. See 11 U.S.C §§ 507(a)(8)(A(I) and 523(a)(b)(ii). Fourth is the IRS requirement that a tax lien must not have been attached to any petitioner property.

In Applicant’s case, she meets all of the IRS-generated criteria for discharging federal tax claims in a Chapter 7 bankruptcy proceeding. Each of the assessed tax debts for tax years 2008-2012 was assessed and due at least three years prior to her petitioning for Chapter 7 relief in December 2016. Her returns for the 2008-2012 tax debts in issue were filed timely. IRS tax assessments for these past years were completed more than 240 days from when Applicant petitioned for Chapter 7 relief. And finally, the IRS never filed a tax lien to cover the back tax debts in issue. In sum, each of Applicant’s back federal tax debts included in her 2016 Chapter 7 bankruptcy petition met IRS criteria for dischargeability and are entitled to be treated as discharged under the bankruptcy court’s discharge order.

Applicant’s late filing of her 2013-2014 federal returns and accumulation of delinquent federal tax and consumer debts merit partial application of 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.” Applicant has been the sole family provider for many years and has struggled with her finances after her husband could no longer assist. She provided probative evidence of financial hardships that would partially explain (a) her failing to timely file her federal tax returns for tax years 2013 and 2014 and (b) her failing to address her accrued federal tax and consumer debts before petitioning for Chapter 7 bankruptcy relief in 2016.

Considering all of the evidence, extenuating circumstances played a considerable role in Applicant’s debt accumulations and her efforts to address them through two Chapter 7 bankruptcy petitions, first in 2006 and more recently in 2016. Applicant’s financial problems have been heightened by the financial burdens associated with the financial support she has provided her stay-at-home husband and children.

Historically, the timing of filing of federal and state tax returns 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) In Applicant’s case, she demonstrated responsible efforts in timely filing her 2008-2012 and more recent 2015-2016 federal tax returns.

To be sure, Applicant filed her 2013 and 2014 returns late. Filing her returns before receiving the SOR is still probative, however, of her efforts to demonstrate responsible tax-filing practices as evidence of her trustworthiness. She has been proactive, too, in filing her state returns for 2013-2014 and receiving zero balance credit summaries from her state tax authority.

Applicant’s responsible efforts in addressing her debts with the limited resources available to her enable her to be credited 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 efforts to resolve her debts through a combination of Chapter 7 bankruptcy relief and installment arrangements with the IRS enable her to avail herself 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 completing an on-line course in personal financial management in compliance with her Chapter 7 petition requirements, Applicant merits some benefit of MC ¶ 20(c), “the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control.”

Applicant may also avail herself 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.” In 2017, Applicant applied for, and was approved by the IRS for an installment agreement covering taxes owed for tax years 2013 and 2014. (AE I) Under the payment terms of her agreement, she is obligated to make monthly payments of $50, beginning in June 2017. Because her first payment is not yet due, she has had no opportunity to develop a payment track record to assess for adherence to her payment terms. She has impressed her supervisors and colleagues with her integrity and trustworthiness, and with the resources currently available to her can be expected to establish a consistent payment track record in compliance with the agreement’s terms.

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) While Applicant’s SOR debts have and are being resolved mostly through bankruptcy and installment arrangements with the IRS, her efforts have been marked by voluntary initiatives with very limited income resources to draw upon. Her corrective efforts reflect responsible actions under the circumstances.

Whole-person assessment is favorable to Applicant. She has shown considerable progress in filing her federal tax returns in a timely way and taking the necessary legal steps to resolve her federal tax debts while staying current with her state tax filings and taxes owed. She is highly regarded by her supervisors and colleagues as a trustworthy and reliable call center supervisor who has made important contributions to her company’s healthcare mission.

Overall, public trust eligibility assessment of Applicant favors Applicant. Based on the compiled documentation and her corroborating testimony, Applicant demonstrates trustworthiness, reliability, and judgment compatible with eligibility criteria for holding a public trust position. Her exhibited financial progress in addressing her finances and earning the positive impressions she has forged with her supervisors and colleagues are enough to overcome trustworthiness concerns associated with her late filing of her federal tax returns and accumulation of delinquent tax and consumer debts over a period of several years.

Taking into account all of the documented facts and circumstances surrounding Applicant’s federal tax filing lapses and debt accruals that she has resolved through late tax filings, Chapter 7-bankruptcy discharges, and installment arrangements with the IRS, Applicant has demonstrated enough probative efforts to mitigate financial concerns. Conclusions are warranted that her finances are sufficiently stabilized at this time to grant her eligibility to hold a public trust position.

Favorable conclusions are entered with respect to the allegations covered by subparagraphs 1.a through 1.o of the SOR. Eligibility to hold a public trust position under the facts and circumstances is fully consistent with the national interest.

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): FOR APPLICANT

Subparagraphs 1.a-1.o: For Applicant

In light of all the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant or continue Applicant’s eligibility to hold a public trust position. Eligibility to hold a public trust position is granted.

Roger C. Wesley Administrative Judge

December 10, 2016, National Security Adjudicative Guidelines for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position, and by extension eligibility to hold a trustworthiness position, were established to supercede all previously issued national security adjudicative criteria or guidelines. Procedures for administrative due process for contractor personnel continue to be governed by DoDD 5220.6, subject to the updated substantive changes in the guidelines. The new AGs are available at http://ogc.osd.mil/doha/5220.6 R20170608.pdf. The result would be the same under both guidelines.