Summary
A 59-year-old federal contractor and Army veteran was denied a security clearance under Guideline F (Financial Considerations) due to significant unresolved debts. The Statement of Reasons alleged the applicant owed approximately $257,000 to 11 creditors, with over $197,000 attributed to unpaid federal taxes. This financial distress reportedly stemmed from the closure of his business.
While the applicant did resolve some specific debts—one in May 2011, another through successful dispute, and several more after the hearing—substantial obligations remained. Specifically, over $197,000 in federal tax liens were unresolved, along with other delinquent accounts, including one secured by a lien on his home.
The denial was based on the applicant's failure to demonstrate a good-faith effort to resolve his delinquent debts and the absence of a concrete plan to address his financial obligations, particularly the outstanding federal tax liens. Despite some mitigating factors being considered, the judge found insufficient evidence to grant the clearance.
Why the Applicant Was Denied
- Applicant has over $197,000 in unresolved federal tax liens.
- Applicant failed to demonstrate a good-faith effort to resolve his delinquent debts.
- The applicant did not provide a concrete plan for addressing his financial obligations.
Conditions Referenced
- F.1.araisedInability or Unwillingness to Satisfy Debts
- F.1.craisedA History of Not Meeting Financial Obligations
- F.2.aappliedThe Behavior Happened so Long Ago, Was so Infrequent, or Occurred Under Such Circumstances That It Is Unlikely to Recur
- F.2.bappliedThe Conditions That Resulted in the Financial Problem Were Largely Beyond the Person’s Control
- F.2.crejectedThe Person Has Received or Is Receiving Counseling for the ProblemWhile the applicant retained a CPA, he did not demonstrate effective progress in resolving his debts.
- F.2.drejectedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant's payments were largely involuntary and did not demonstrate a proactive approach to debt resolution.
Key Rule Quoted
“An applicant is not required to be debt-free nor to develop a plan for paying off all debts immediately or simultaneously. All that is required is that an applicant act responsibly given his circumstances and develop a reasonable plan for repayment, accompanied by concomitant conduct, that is, actions which evidence a serious intent to effectuate the plan.”
Procedural Posture
- SOR issuedJul 6, 2011
- Answer filed—
- Hearing heldDec 7, 2011
- Decision dateFeb 1, 2012
Cite For
- Financial Considerations Under Guideline F
- Impact of Unresolved Federal Tax Liens on Security Clearance Eligibility
- Requirements for Demonstrating Good-faith Efforts to Resolve Debts