ISCR Case 10-02593.h1

Case Headnote

ISCR Case No. 10-02593.h1

deniedJun 1, 2012· Hon. Marc E. Curry· hearing

Summary

A 57-year-old self-employed information technology consultant was denied a security clearance due to concerns under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The applicant failed to file state income tax returns from 1998 to 2003 until 2011, resulting in a $121,000 lien against his property in 2005. Additionally, in 2009, he was notified by the IRS of an outstanding balance of approximately $5,261 for his 2008 taxes and instructed to re-file.

The applicant also had several miscellaneous debts, including utility bills from a skating rink that accrued after a change in ownership, and medical bills related to his daughter's birth, which he paid upon identification. One $70 debt remained unrecognized despite his efforts. A key concern was the applicant's omission of relevant income tax filing information from his security clearance application, which the judge found to be a deliberate omission and disingenuous, particularly regarding his claim of unawareness of the tax lien.

Ultimately, the judge determined that the applicant failed to mitigate these concerns. The denial was based on his failure to file multiple years of state income tax returns, the significant tax lien, the omission of relevant financial information on his application, and a lack of demonstrated good-faith effort to resolve his financial issues, especially his tax obligations.

Why the Applicant Was Denied

The applicant failed to file state income tax returns for multiple years, leading to a significant tax lien against his property.
The applicant's omission of relevant financial information on his security clearance application was deemed disingenuous and undermined his credibility.
The applicant did not demonstrate a good-faith effort to resolve his financial issues, particularly regarding his unresolved tax obligations.

Conditions Referenced

Disqualifying

AG ¶ 19(a)appliedInability or Unwillingness to Satisfy Debts
AG ¶ 19(c)appliedA History of Not Meeting Financial Obligations
AG ¶ 19(g)appliedFailure to File Annual Federal, State, or Local Income Tax Returns as Required
AG ¶ 16(a)appliedDeliberate Omission, Concealment, or Falsification of Relevant Facts

Mitigating

AG ¶ 20(b)rejectedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's ControlThe applicant acknowledged procrastination and personal circumstances contributed to his financial issues.
AG ¶ 20(c)rejectedReceived or Is Receiving Counseling for the ProblemThe applicant did not consult with a credit counselor.
AG ¶ 20(d)rejectedInitiated a Good-faith Effort to Repay Overdue CreditorsThe applicant did not demonstrate a good-faith effort to resolve his tax issues.

Key Rule Quoted

“The protection of the national security is the paramount consideration.”

Procedural Posture

SOR issuedNov 17, 2011
Answer filedDec 15, 2011
Hearing heldApr 12, 2012
Decision dateJun 1, 2012

Cite For

Failure to Mitigate Financial Considerations Under Guideline F
Failure to Disclose Required Information Under Guideline E
Impact of Credibility on Security Clearance Decisions

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

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
2.a	Applicant’s omission of relevant and material information about his income tax filings from his security clearance application raises the issue of whether AG ¶ 16(a), "deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities," applies.	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—
2.b	Given that Applicant did not file his taxes from 1999 to 2003 until 2011, his contention that he was unaware of any related tax lien until he was confronted by an investigator, is disingenuous.	Against Applicant	Omission or Failure to DiscloseFOUND DELIBERATE	Financial	Denied	(a) deliberate omission, concealment, or falsification on a security form	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Applicant’s omission of relevant and material information about his income tax filings from his security clearance application raises the issue of whether AG ¶ 16(a), "deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities," applies.

Against Applicant

Omission or Failure to DiscloseFOUND DELIBERATE

Financial

Denied

(a) deliberate omission, concealment, or falsification on a security form

—

2.b

Given that Applicant did not file his taxes from 1999 to 2003 until 2011, his contention that he was unaware of any related tax lien until he was confronted by an investigator, is disingenuous.

Against Applicant

Omission or Failure to DiscloseFOUND DELIBERATE

Financial

Denied

(a) deliberate omission, concealment, or falsification on a security form

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant failed to file his state income tax returns for tax years 1998 to 2003 until 2011, leading to a lien in the amount of $121,000 being issued against his property in 2005. $121,000	Against Applicant	Tax Unpaid	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	—	—
1.b	In 2009, Applicant received notice from the U.S. Internal Revenue Service that he owed approximately $5,261 more than he had paid for tax year 2008. He was instructed to re-file his 2008 income tax return. $5,261	Against Applicant	Tax Unpaid	Unknown	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	—	—
1.c	Applicant did not file his state income tax returns for tax years 1998 to 2003 until 2011.	Against Applicant	Tax Filing Failure	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations (g) unexplained affluence	—	—
1.d	The SOR alleges five miscellaneous debts totaling approximately $500, as listed in subparagraphs 1.d through 1.h. Subparagraphs 1.d and 1.h are utility bills from the skating rink that accrued after it changed ownership.	For Applicant	Utility or Phone Debt	Unknown	—	—	—
1.e	Subparagraph 1.e are medical bills related to the birth of Applicant’s daughter. He paid them shortly after he identified them.	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Credited Debt Paid in Full
1.f	Subparagraph 1.f are medical bills related to the birth of Applicant’s daughter. He paid them shortly after he identified them.	For Applicant	Medical Debt	Admitted	—	(d) good-faith effort to repay or otherwise resolve debts	Credited Debt Paid in Full
1.g	Applicant does not recognize the creditor listed in subparagraph 1.g. His efforts at identifying it have been unsuccessful. The bill totals $70. $70	For Applicant	Unspecified Financial	Unknown	—	—	—
1.h	Subparagraphs 1.d and 1.h are utility bills from the skating rink that accrued after it changed ownership.	For Applicant	Utility or Phone Debt	Unknown	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant failed to file his state income tax returns for tax years 1998 to 2003 until 2011, leading to a lien in the amount of $121,000 being issued against his property in 2005.

$121,000

Against Applicant

Tax Unpaid

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(g) unexplained affluence

—

1.b

In 2009, Applicant received notice from the U.S. Internal Revenue Service that he owed approximately $5,261 more than he had paid for tax year 2008. He was instructed to re-file his 2008 income tax return.

$5,261

Against Applicant

Tax Unpaid

Unknown

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(g) unexplained affluence

—

1.c

Applicant did not file his state income tax returns for tax years 1998 to 2003 until 2011.

Against Applicant

Tax Filing Failure

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(g) unexplained affluence

—

1.d

The SOR alleges five miscellaneous debts totaling approximately $500, as listed in subparagraphs 1.d through 1.h. Subparagraphs 1.d and 1.h are utility bills from the skating rink that accrued after it changed ownership.

For Applicant

Utility or Phone Debt

Unknown

—

1.e

Subparagraph 1.e are medical bills related to the birth of Applicant’s daughter. He paid them shortly after he identified them.

For Applicant

Medical Debt

Admitted

—

(d) good-faith effort to repay or otherwise resolve debts

Credited

Debt Paid in Full

1.f

Subparagraph 1.f are medical bills related to the birth of Applicant’s daughter. He paid them shortly after he identified them.

For Applicant

Medical Debt

Admitted

—

(d) good-faith effort to repay or otherwise resolve debts

Credited

Debt Paid in Full

1.g

Applicant does not recognize the creditor listed in subparagraph 1.g. His efforts at identifying it have been unsuccessful. The bill totals $70.

$70

For Applicant

Unspecified Financial

Unknown

—

1.h

Subparagraphs 1.d and 1.h are utility bills from the skating rink that accrued after it changed ownership.

For Applicant

Utility or Phone Debt

Unknown

—

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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