Summary
A 47-year-old single man with two children was denied a security clearance under Guideline F (Financial Considerations) due to significant financial delinquencies. The Statement of Reasons detailed approximately $50,000 in outstanding federal and state income taxes, stemming from unfiled returns and unpaid taxes for tax years 2003 to 2009. Specific debts included a 2005 state tax lien for $7,418, a cell phone debt of $2,640, and a $747 bank debt from a bounced check.
The denial was primarily based on the applicant's long history of failing to file and pay taxes, with delinquencies extending back to the early 1990s. While the applicant retained a tax consultant, this action was deemed insufficient to mitigate the security concerns.
The judge found that the lack of a developed payment plan and the ongoing nature of the delinquencies raised significant security concerns, leading to the denial of the security clearance.
Why the Applicant Was Denied
- Applicant owes approximately $50,000 in delinquent federal and state income taxes.
- The applicant has a long history of failing to file and pay taxes, with delinquencies dating back to the early 1990s.
- Retention of a tax consultant was insufficient to mitigate the security concerns due to the lack of a developed payment plan and ongoing delinquencies.
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 Federal, State, or Local Income Tax Returns as Required
- AG ¶ 20(d)appliedGood-faith Effort to Repay Overdue Creditors or Resolve Debts
- AG ¶ 20(c)rejectedReceiving Counseling for the ProblemThe applicant's retention of a tax consultant was too early to conclude that the problem was under control.
- AG ¶ 20(e)rejectedReasonable Basis to Dispute the Legitimacy of the Past-due DebtThe applicant did not provide evidence to substantiate the dispute regarding the cell phone debt.
Key Rule Quoted
“"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 information."”
Procedural Posture
- SOR issuedApr 15, 2011
- Answer filedMay 27, 2010
- Hearing heldAug 2, 2011
- Decision dateAug 31, 2011
Cite For
- Denial of Security Clearance Due to Significant Financial Delinquencies Under Guideline F
- Insufficient Mitigation of Financial Issues Despite Retention of a Tax Consultant
- Long History of Non-compliance with Tax Obligations as a Disqualifying Factor