Summary
A 50-year-old defense contractor, employed overseas, was denied a security clearance under Guideline E (Personal Conduct) and Guideline F (Financial Considerations). The denial stemmed from a prolonged history of failing to file federal tax returns and significant financial overextension.
Specifically, the applicant failed to file federal tax returns for the years 2000, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009, and 2010. This led to the IRS filing a federal tax levy in May 2011 for $789,746.07, covering taxes, interest, and penalties for the 2000, 2002, 2003, 2005, 2006, and 2007 tax years. While the judge found insufficient evidence of willful falsification on the security clearance questionnaire, the applicant's financial issues raised substantial concerns regarding reliability and trustworthiness.
The denial was based on the applicant's failure to file tax returns, the resulting tax liabilities and levy, and a lack of timely action to resolve these issues. The applicant's procrastination and absence of demonstrated responsible behavior or permanent behavioral changes to mitigate the financial problems ultimately led to the denial.
Why the Applicant Was Denied
- The applicant failed to file federal tax returns for multiple years, resulting in significant tax liabilities and a federal tax levy.
- The applicant's procrastination and lack of timely action to resolve tax issues raised doubts about his reliability and trustworthiness.
- The applicant's financial problems were not mitigated by any evidence of responsible behavior or permanent behavioral changes.
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 Annual Federal, State, or Local Income Tax Returns as Required
- AG ¶ 20(a)rejectedBehavior Happened so Long Ago, Was Infrequent, or Unlikely to RecurThe applicant's failure to file tax returns was extensive and recent.
- AG ¶ 20(b)rejectedConditions That Resulted in Financial Problems Were Largely Beyond the Person's ControlThe applicant admitted his financial issues were within his control.
- AG ¶ 20(d)rejectedGood-faith Effort to Repay Overdue Creditors or Resolve DebtsThe applicant's tax issues were only resolved after significant government intervention.
Key Rule Quoted
“The protection of the national security is the paramount consideration.”
Procedural Posture
- SOR issuedJul 24, 2013
- Answer filedAug 22, 2013
- Hearing heldNov 20, 2013
- Decision dateJan 31, 2014
Cite For
- Denial of Clearance Due to Financial Irresponsibility Under Guideline F
- Insufficient Evidence of Willful Falsification Under Guideline E
- Importance of Timely Tax Compliance in Security Clearance Evaluations