ISCR Case 11-12293.h1

Case Headnote

ISCR Case No. 11-12293.h1

grantedJul 19, 2013· Hon. Philip S. Howe· hearing

Summary

A 53-year-old former pizza restaurant operator was granted a security clearance despite initial concerns under Guideline F (Financial Considerations) due to $73,672.52 in financial obligations. The applicant demonstrated active efforts to resolve these debts, including establishing installment agreements for credit card and tax debts, and submitting offers in compromise for significant tax liabilities.

Specifically, the applicant resolved several smaller debts, including a $1,200 judgment, a $115 medical bill, and a $52 telephone bill, through settlement or full payment. For larger credit card debts of $7,315 and $5,506, he entered into installment agreements, making regular payments since March 2013. Significant tax debts, including $21,815 to the U.S. Government, $1,000 to a city taxing authority, and approximately $36,669.52 to a state Department of Taxation, were being actively addressed through legal representation, installment plans, and pending offers in compromise.

The judge determined that the applicant's financial difficulties were largely beyond his control, stemming from the failure of his pizza business. His consistent efforts to mitigate these issues, coupled with positive character references, demonstrated a good-faith commitment to resolving his financial situation. Consequently, the security clearance was granted.

Why the Applicant Prevailed

The applicant demonstrated a good-faith effort to repay debts and resolve financial issues.
The financial difficulties were largely due to circumstances beyond the applicant's control, such as a business downturn.
The applicant's character references supported his honesty and trustworthiness.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(b)appliedConditions That Resulted in the Financial Problem Were Largely Beyond the Person's Control
AG ¶ 20(c)appliedThe Person Has Received or Is Receiving Counseling for the Problem And/or There Are Clear Indications That the Problem Is Being Resolved or Is Under Control
AG ¶ 20(d)appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

Key Rule Quoted

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

Procedural Posture

SOR issuedFeb 5, 2013
Answer filedMar 14, 2013
Hearing heldJun 24, 2013Applicant requested to keep the record open until July 15, 2013.
Decision dateAug 20, 2013

Cite For

Mitigating Conditions for Financial Considerations Under Guideline F
Good-faith Efforts to Resolve Debts
Impact of Circumstances Beyond Control on Financial Obligations

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	Applicant owes $7,315 on a credit card (Subparagraphs 1.a and 1.f). He arranged an installment payment agreement with the creditor and made four payments by the date of the hearing, starting in March 2013. The payments are $300 each month. This debt is being resolved. $7,315	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Debt Paid in Full Documented Payment Plan with Creditor
1.b	Applicant owes $5,506 to a creditor on a credit card (Subparagraphs 1.b and 1.g). He negotiated with the collector to establish an installment payment agreement. He made four payments on that agreement by the time of the hearing, starting in March 2013. The payments are $200 each. This debt is being resolved. $5,506	For Applicant	Credit Card Debt	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with Creditor
1.c	Applicant owes $1,200 on a judgment entered for a creditor in 2010 (Subparagraph 1.c). This debt arose from a credit card used at a home improvement center. Applicant settled the account for $776.94, which was paid on April 15,. This debt is resolved. $1,200	For Applicant	Judgment Against Applicant	Admitted	—	—	Documented Debt Paid in Full
1.d	Applicant owes $115 to a medical creditor for services rendered (Subparagraph 1.d). This debt was paid in full on March 2, 2013. This debt is resolved as shown by the letter from the creditor attached to Applicant’s answer and dated March 6, 2013. $115	For Applicant	Medical Debt	Admitted	—	—	Documented Debt Paid in Full
1.e	Applicant owes $52 for a telephone bill (Subparagraph 1.e). This debt is resolved by payment of $31.49 on February 26, 2013. Applicant submitted a letter from the collector dated March 7, 2013, showing a zero balance. $52	For Applicant	Utility or Phone Debt	Admitted	—	—	Documented Debt Paid in Full
1.h	Applicant owes $21,815 to the U.S. Government on a tax lien filed against him in 2004 (Subparagraph 1.h) for unpaid payroll taxes. He filed all the required tax returns. This debt resulted from the failure of Applicant’s pizza business. Applicant hired an attorney to represent him with the Internal Revenue Service (IRS) to attempt to resolve this debt. An offer in compromise was filed by the attorney on June 19, 2013, for $1,000. Applicant made a $200 good-faith payment on that debt. The offer is pending with the IRS. Applicant is attempting to resolve this debt. $21,815	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Other
1.i	Applicant owes $1,000 to a city taxing authority for an earnings tax (Subparagraph 1.i). This debt results from Applicant’s business and its closure. He is represented by an attorney in this matter. The Answer states the matter is being resolved by an installment agreement on which Applicant is making payments until paid in full. Applicant claims that since August 2011 he has tried to pay $300 monthly to repay this debt. Some months he cannot make a payment because his income and expenses do not allow him to do so. Applicant is attempting to resolve this debt by making the installment payments. $1,000	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Documented Payment Plan with IRS
1.j	Applicant is indebted to his state Department of Taxation, in the approximate amount of $36,669.52 for delinquent payroll taxes (Subparagraph 1.j). This debt remains unpaid, but Applicant has been paying since 2009 on this debt. He filed all required tax forms. In 2011 he contacted the assistant attorney general to enter an installment payment agreement on this debt. He has paid $9,200 since 2009 on the debt. He paid $300 monthly on the debt until his attorney recently filed an offer in compromise with the state, and the payments were reduced to $200 monthly in February 2013. Applicant is attempting to resolve this debt. $36,669	For Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (c) a history of not meeting financial obligations	(b) conditions largely beyond the person’s control; acted responsibly (c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts	Claimed Other

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant owes $7,315 on a credit card (Subparagraphs 1.a and 1.f). He arranged an installment payment agreement with the creditor and made four payments by the date of the hearing, starting in March 2013. The payments are $300 each month. This debt is being resolved.

$7,315

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

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

Documented

Debt Paid in Full

Documented

Payment Plan with Creditor

1.b

Applicant owes $5,506 to a creditor on a credit card (Subparagraphs 1.b and 1.g). He negotiated with the collector to establish an installment payment agreement. He made four payments on that agreement by the time of the hearing, starting in March 2013. The payments are $200 each. This debt is being resolved.

$5,506

For Applicant

Credit Card Debt

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

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

Documented

Payment Plan with Creditor

1.c

Applicant owes $1,200 on a judgment entered for a creditor in 2010 (Subparagraph 1.c). This debt arose from a credit card used at a home improvement center. Applicant settled the account for $776.94, which was paid on April 15,. This debt is resolved.

$1,200

For Applicant

Judgment Against Applicant

Admitted

—

Documented

Debt Paid in Full

1.d

Applicant owes $115 to a medical creditor for services rendered (Subparagraph 1.d). This debt was paid in full on March 2, 2013. This debt is resolved as shown by the letter from the creditor attached to Applicant’s answer and dated March 6, 2013.

$115

For Applicant

Medical Debt

Admitted

—

Documented

Debt Paid in Full

1.e

Applicant owes $52 for a telephone bill (Subparagraph 1.e). This debt is resolved by payment of $31.49 on February 26, 2013. Applicant submitted a letter from the collector dated March 7, 2013, showing a zero balance.

$52

For Applicant

Utility or Phone Debt

Admitted

—

Documented

Debt Paid in Full

1.h

Applicant owes $21,815 to the U.S. Government on a tax lien filed against him in 2004 (Subparagraph 1.h) for unpaid payroll taxes. He filed all the required tax returns. This debt resulted from the failure of Applicant’s pizza business. Applicant hired an attorney to represent him with the Internal Revenue Service (IRS) to attempt to resolve this debt. An offer in compromise was filed by the attorney on June 19, 2013, for $1,000. Applicant made a $200 good-faith payment on that debt. The offer is pending with the IRS. Applicant is attempting to resolve this debt.

$21,815

For Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

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

Claimed

Other

1.i

Applicant owes $1,000 to a city taxing authority for an earnings tax (Subparagraph 1.i). This debt results from Applicant’s business and its closure. He is represented by an attorney in this matter. The Answer states the matter is being resolved by an installment agreement on which Applicant is making payments until paid in full. Applicant claims that since August 2011 he has tried to pay $300 monthly to repay this debt. Some months he cannot make a payment because his income and expenses do not allow him to do so. Applicant is attempting to resolve this debt by making the installment payments.

$1,000

For Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

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

Documented

Payment Plan with IRS

1.j

Applicant is indebted to his state Department of Taxation, in the approximate amount of $36,669.52 for delinquent payroll taxes (Subparagraph 1.j). This debt remains unpaid, but Applicant has been paying since 2009 on this debt. He filed all required tax forms. In 2011 he contacted the assistant attorney general to enter an installment payment agreement on this debt. He has paid $9,200 since 2009 on the debt. He paid $300 monthly on the debt until his attorney recently filed an offer in compromise with the state, and the payments were reduced to $200 monthly in February 2013. Applicant is attempting to resolve this debt.

$36,669

For Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(c) a history of not meeting financial obligations

(b) conditions largely beyond the person’s control; acted responsibly

(c) received/receiving counseling; problem being resolved

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

Claimed

Other

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Case Profile

Summary

Why the Applicant Prevailed

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