ISCR Case 09-08083.h1

Case Headnote

ISCR Case No. 09-08083.h1

deniedApr 13, 2011· Hon. Rita C. O'Brien· hearing

Summary

A 60-year-old former U.S. Air Force member was denied a security clearance under Guideline F (Financial Considerations) due to a history of financial irresponsibility and a lack of consistent effort to resolve significant debts.

The applicant admitted to multiple outstanding financial obligations. These included a $2,659 judgment from two bank loans in the mid-2000s, which was paid in full by May 2010 after a payment plan was initiated. He also had state tax liens totaling approximately $6,000, with $3,273 specifically cited, which were paid primarily through seized refunds. However, substantial IRS tax liens totaling $51,612, stemming from tax years including 1995-1999 and 2002-2003, remained pending with intermittent payment plans. Payments of $200 per month were made from 1991-1996, and $385-$500 per month from 2008-2009, but these ceased in April 2009 to prioritize a car loan. At the time of his September 2009 security interview, he planned to re-establish an IRS payment plan. Additionally, a collection debt of $2,302, delinquent since 2007, was under a payment plan initiated in May 2010.

The denial was based on the applicant's failure to consistently meet financial obligations over two decades, with most tax debts remaining unpaid despite 13 years of steady employment. The judge concluded that the applicant's sporadic efforts to address his debts did not demonstrate the required reliability and good judgment.

Why the Applicant Was Denied

The applicant failed to consistently meet financial obligations over two decades.
Most of the applicant's tax debts remain unpaid despite steady employment for 13 years.
The applicant's sporadic efforts to address his debts do not demonstrate reliability and good judgment.

Conditions Referenced

Disqualifying

AG ¶ 19 (a)appliedInability or Unwillingness to Satisfy Debts
AG ¶ 19 (c)appliedA History of Not Meeting Financial Obligations

Mitigating

AG ¶ 20 (d)rejectedGood-faith Effort to Repay Overdue CreditorsThe applicant's efforts to pay debts have been inconsistent and primarily through seizure of refunds.

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.”
— AG ¶ 18

Procedural Posture

SOR issuedSep 14, 2010
Answer filedOct 26, 2010
Hearing held—Decision made without a hearing.
Decision dateApr 13, 2011

Cite For

Failure to Mitigate Financial Issues Under Guideline F
Impact of Long-term Financial Irresponsibility on Security Clearance Eligibility
Evaluation of Good-faith Efforts in Resolving Debts

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

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Judgment, $2,659 – PAID. The debt relates to two bank loans Applicant opened in the mid-2000s. He did not make payments for several years. In 2008, the creditor filed suit against Applicant for the unpaid balance. Applicant stated in his 2010 Answer that he was not notified of the judgment. However, during his 2009 security interview, Applicant informed the agent that the creditor had sued him. He started a payment plan for $125 per month to be automatically deducted from his bank account. He submitted documentation showing the debt was paid in full in May 2010. $2,659	Against Applicant	Judgment Against Applicant	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.b	IRS tax liens: $51,612 – PAYMENT PLAN pending. Applicant has had payment plans in effect at various times with the IRS. He paid $200 per month via allotment from 1991 to 1996. From 2008 to 2009, he paid $385 to $500 per month. He ended the payments in April 2009 so that he could make payments on a car loan. At the time of his September 2009 security interview, he planned to contact the IRS to set up a new payment plan. He stated that in 2007, the IRS informed him he owed $17,000 for tax years 1995 through 1999 and 2002 through 2003. $51,612	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.c	IRS tax liens: $51,612 – PAYMENT PLAN pending. Applicant has had payment plans in effect at various times with the IRS. He paid $200 per month via allotment from 1991 to 1996. From 2008 to 2009, he paid $385 to $500 per month. He ended the payments in April 2009 so that he could make payments on a car loan. At the time of his September 2009 security interview, he planned to contact the IRS to set up a new payment plan. He stated that in 2007, the IRS informed him he owed $17,000 for tax years 1995 through 1999 and 2002 through 2003. $51,612	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.d	IRS tax liens: $51,612 – PAYMENT PLAN pending. Applicant has had payment plans in effect at various times with the IRS. He paid $200 per month via allotment from 1991 to 1996. From 2008 to 2009, he paid $385 to $500 per month. He ended the payments in April 2009 so that he could make payments on a car loan. At the time of his September 2009 security interview, he planned to contact the IRS to set up a new payment plan. He stated that in 2007, the IRS informed him he owed $17,000 for tax years 1995 through 1999 and 2002 through 2003. $51,612	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.e	IRS tax liens: $51,612 – PAYMENT PLAN pending. Applicant has had payment plans in effect at various times with the IRS. He paid $200 per month via allotment from 1991 to 1996. From 2008 to 2009, he paid $385 to $500 per month. He ended the payments in April 2009 so that he could make payments on a car loan. At the time of his September 2009 security interview, he planned to contact the IRS to set up a new payment plan. He stated that in 2007, the IRS informed him he owed $17,000 for tax years 1995 through 1999 and 2002 through 2003. $51,612	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.f	State tax liens: (allegation 1.f, $1,603; allegation 1.h, $1,670) totaling $3,273 – PAID. Applicant owed back taxes to the state for several tax years. The state tax liens began in tax year 1990, and total about $6,000. He paid these deficiencies primarily through seizure of his refunds each year. $1,603	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.g	IRS tax liens: $51,612 – PAYMENT PLAN pending. Applicant has had payment plans in effect at various times with the IRS. He paid $200 per month via allotment from 1991 to 1996. From 2008 to 2009, he paid $385 to $500 per month. He ended the payments in April 2009 so that he could make payments on a car loan. At the time of his September 2009 security interview, he planned to contact the IRS to set up a new payment plan. He stated that in 2007, the IRS informed him he owed $17,000 for tax years 1995 through 1999 and 2002 through 2003. $51,612	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.h	State tax liens: (allegation 1.f, $1,603; allegation 1.h, $1,670) totaling $3,273 – PAID. Applicant owed back taxes to the state for several tax years. The state tax liens began in tax year 1990, and total about $6,000. He paid these deficiencies primarily through seizure of his refunds each year. $1,670	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.i	IRS tax liens: $51,612 – PAYMENT PLAN pending. Applicant has had payment plans in effect at various times with the IRS. He paid $200 per month via allotment from 1991 to 1996. From 2008 to 2009, he paid $385 to $500 per month. He ended the payments in April 2009 so that he could make payments on a car loan. At the time of his September 2009 security interview, he planned to contact the IRS to set up a new payment plan. He stated that in 2007, the IRS informed him he owed $17,000 for tax years 1995 through 1999 and 2002 through 2003. $51,612	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—
1.j	Collection debt totaling $2,302 – PAYMENT PLAN. This debt has been delinquent since 2007. Applicant contacted the creditor in May 2010 and set up a payment plan for $200 per month starting October 2010. In his January 2011 Reply, he estimated the debt would be paid in eight months (August 2011). He provided proof of a reduced balance of $1,902, with a hand-written note that the balance is $1,702. $2,302	Against Applicant	Unspecified Financial	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Judgment, $2,659 – PAID. The debt relates to two bank loans Applicant opened in the mid-2000s. He did not make payments for several years. In 2008, the creditor filed suit against Applicant for the unpaid balance. Applicant stated in his 2010 Answer that he was not notified of the judgment. However, during his 2009 security interview, Applicant informed the agent that the creditor had sued him. He started a payment plan for $125 per month to be automatically deducted from his bank account. He submitted documentation showing the debt was paid in full in May 2010.

$2,659

Against Applicant

Judgment Against Applicant

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.b

IRS tax liens: $51,612 – PAYMENT PLAN pending. Applicant has had payment plans in effect at various times with the IRS. He paid $200 per month via allotment from 1991 to 1996. From 2008 to 2009, he paid $385 to $500 per month. He ended the payments in April 2009 so that he could make payments on a car loan. At the time of his September 2009 security interview, he planned to contact the IRS to set up a new payment plan. He stated that in 2007, the IRS informed him he owed $17,000 for tax years 1995 through 1999 and 2002 through 2003.

$51,612

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.c

$51,612

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.d

$51,612

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.e

$51,612

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.f

State tax liens: (allegation 1.f, $1,603; allegation 1.h, $1,670) totaling $3,273 – PAID. Applicant owed back taxes to the state for several tax years. The state tax liens began in tax year 1990, and total about $6,000. He paid these deficiencies primarily through seizure of his refunds each year.

$1,603

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.g

$51,612

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.h

$1,670

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.i

$51,612

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

1.j

Collection debt totaling $2,302 – PAYMENT PLAN. This debt has been delinquent since 2007. Applicant contacted the creditor in May 2010 and set up a payment plan for $200 per month starting October 2010. In his January 2011 Reply, he estimated the debt would be paid in eight months (August 2011). He provided proof of a reduced balance of $1,902, with a hand-written note that the balance is $1,702.

$2,302

Against Applicant

Unspecified Financial

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

—

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Case Profile

Summary

Why the Applicant Was Denied

Conditions Referenced

Key Rule Quoted

Procedural Posture

Cite For

Full decision

DEFENSE OFFICE OF HEARINGS AND APPEALS

HEARING

APPEARANCES

STATEMENT OF CASE

FINDINGS OF FACT

POLICIES

ANALYSIS

WHOLE PERSON CONCEPT

FORMAL FINDINGS

CONCLUSION

FOOTNOTES