ISCR Case 12-10756.h1

Case Headnote

ISCR Case No. 12-10756.h1

grantedApr 5, 2016· Hon. Robert Robinson Gales· hearing

Summary

A 58-year-old defense contractor employee was granted a security clearance despite initial concerns under Guideline F (Financial Considerations) due to delinquent accounts and tax liens. The Statement of Reasons detailed four specific financial issues. These included a credit union credit card with an $8,835 high credit, which became 60-days past due in 2013. After multiple attempts to secure a hardship program, the applicant entered a special payment relief program, made consistent payments, and later established a 24-month repayment schedule with a new company, making monthly payments of $85.20.

Another concern was a bank credit card for a home repair store, with a $3,134 high credit, which became 30-days past due in 2013. The applicant successfully entered a temporary repayment program, making $36 monthly payments, and later secured an agreement for $66 monthly payments by automatic transfer. Additionally, a state income tax lien for $11,490, filed in 2010 for an unspecified tax year, was fully paid off by December 2013 through an installment agreement of $325 monthly payments.

Finally, a federal income tax lien for $28,451, filed by the IRS in 2011 for tax years 2009 and 2010, was addressed. The applicant initiated a direct debit installment agreement in 2010, making an initial payment of $2,800. Monthly payments, initially $600, were adjusted to $250 and then $100 due to family layoffs, with an agreement to increase to $325. The applicant consistently made these payments, demonstrating a sustained effort to resolve the debt. The clearance was granted because the applicant actively engaged with creditors, demonstrated a long-term commitment to resolving financial issues, and showed an improved financial situation.

Why the Applicant Prevailed

The applicant actively engaged with creditors to establish repayment plans for delinquent accounts.
The applicant demonstrated a commitment to resolving financial issues over several years, including paying off a state tax lien and making consistent payments to the IRS.
The applicant's financial situation showed improvement, indicating a reduced risk of future financial issues.

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(a)appliedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to Recur
AG ¶ 20(b)appliedThe Conditions That Resulted in the Financial Difficulties Were Largely Beyond the Applicant's Control
AG ¶ 20(c)appliedThe Applicant Has Made a Good Faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts

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 issuedMay 21, 2015
Answer filedJun 8, 2015Applicant elected to have the case decided on the written record.
Hearing held—No hearing; decided on the written record.
Decision dateApr 5, 2016

Cite For

Mitigation of Financial Issues Under Guideline F
Good Faith Efforts to Resolve Debts
Improvement in Financial Circumstances as a Basis for Granting Clearance

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	This is a credit union credit card with a high credit of $2,500 that was sold to the financial services company identified in the SOR in 2006 at a time when the account was current. The credit limit was increased to $8,500 and the high credit was increased first to $8,590 and then to $8,835. In 2013, the account became 60-days past due in the amount of $435. In April 2013, Applicant contacted the creditor and sought a repayment plan but the proposed monthly payment was simply too much for Applicant at that time. He contacted the creditor again in June 2013 and sought approval to be enrolled in their hardship program, but his request was denied. He was, however, enrolled in their special payment relief program for 12 months with monthly payments of $137. Applicant made the monthly payments, and when the program ended in June 2014, he again attempted to enroll in the hardship program. He was accepted, but the required monthly payments of $187 were simply too much, and he countered with an offer of between $30 and $75 per month. Applicant made such payments “when [he] could” until April 2015 when his account was blocked. The account had been transferred or sold to another company. Applicant called the new company and they agreed to a monthly repayment schedule for 24 months, starting in June 2015, with Applicant making monthly payments of $85.20 by automatic electronic transfer. At the end of the plan in June 2017, there will be a reevaluation. Monthly transfers have been made. $435	For Applicant	Credit Card Debt	Admitted	—	—	—
1.b	This is a bank credit card for an account with a home repair store with a credit limit of $3,000 and a high credit of $3,134 that became 30 days past due in the amount of $156 in 2013. By early 2015 the past-due balance had increased to $655. In April 2013, Applicant contacted the creditor and sought to enroll in their hardship program. He was successful in gaining entry into a temporary repayment program under which he was to make monthly payments of $36 for 12 months. Applicant made the monthly payments, and when the program ended in June 2014, he again attempted to enroll in the hardship program or some other repayment program. In February 2015 – three months before the SOR was issued – an agreement was reached with Applicant making monthly payments of $66 by automatic electronic transfer. Monthly transfers have been made. $655	For Applicant	Credit Card Debt	Admitted	—	—	—
1.c	This is a state income tax lien in the amount of $11,490 filed in August 2010 because of Applicant’s failure to pay his income tax for an unspecified period believed to be tax year 2009. Applicant enrolled in an installment agreement with the state department of revenue under which he agreed to make monthly payments of $325 until the balance was paid off. Applicant made the monthly payments during the course of the agreement, and on December 12, 2013 – approximately 18 months before the SOR was issued – the balance was paid off to the satisfaction of the state. Despite the resolution of the debt, Applicant’s March 2015 credit report continues to erroneously reflect that the lien remains unpaid and not released or settled. Nevertheless, despite the possibility that the lien may not have been released, or possible incorrect reporting, the account has been resolved. $11,490	For Applicant	Tax Unpaid	Admitted	—	—	—
1.d	This is a federal income tax lien in the amount of $28,451 filed by the Internal Revenue Service (IRS) in August 2011 because of Applicant’s failure to pay his income taxes, penalties, and interest for tax years 2009 ($10,902.39) and 2010 ($17,549.42). Applicant approached the IRS in April 2010 in an effort to obtain a direct debit installment agreement. He also made a payment of $2,800. Under that agreement, Applicant initially agreed to make monthly payments of $600 by automatic electronic transfer until the balance was paid off. In June 2011, the installment agreement had to be modified to $250 per month because of the family layoffs. The monthly $600 payments were routinely made from July 2010 through May 2011. The monthly $250 payments were routinely made from August 2011 through April 2013. In June 2013, the payments were reduced again to $100 per month with an understanding that they would increase to $325 in May 2014. The monthly payments were routinely made during that entire period. Applicant paid $6,600 to the IRS between July 2010 and July 2011; $2,750 between July 2011 and July 2012; $2,600 between July 2012 and July 2013; $1,650 between July 2013 and July 2014; and $3,900 between July 2014 and July 2015. The monthly payments are continuing. While the tax liens are still in place, it is clear that, since April 2010 – over five years before the SOR was issued – Applicant has been in the process of resolving the account. $28,451	For Applicant	Tax Unpaid	Admitted	—	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

This is a credit union credit card with a high credit of $2,500 that was sold to the financial services company identified in the SOR in 2006 at a time when the account was current. The credit limit was increased to $8,500 and the high credit was increased first to $8,590 and then to $8,835. In 2013, the account became 60-days past due in the amount of $435. In April 2013, Applicant contacted the creditor and sought a repayment plan but the proposed monthly payment was simply too much for Applicant at that time. He contacted the creditor again in June 2013 and sought approval to be enrolled in their hardship program, but his request was denied. He was, however, enrolled in their special payment relief program for 12 months with monthly payments of $137. Applicant made the monthly payments, and when the program ended in June 2014, he again attempted to enroll in the hardship program. He was accepted, but the required monthly payments of $187 were simply too much, and he countered with an offer of between $30 and $75 per month. Applicant made such payments “when [he] could” until April 2015 when his account was blocked. The account had been transferred or sold to another company. Applicant called the new company and they agreed to a monthly repayment schedule for 24 months, starting in June 2015, with Applicant making monthly payments of $85.20 by automatic electronic transfer. At the end of the plan in June 2017, there will be a reevaluation. Monthly transfers have been made.

$435

For Applicant

Credit Card Debt

Admitted

—

1.b

This is a bank credit card for an account with a home repair store with a credit limit of $3,000 and a high credit of $3,134 that became 30 days past due in the amount of $156 in 2013. By early 2015 the past-due balance had increased to $655. In April 2013, Applicant contacted the creditor and sought to enroll in their hardship program. He was successful in gaining entry into a temporary repayment program under which he was to make monthly payments of $36 for 12 months. Applicant made the monthly payments, and when the program ended in June 2014, he again attempted to enroll in the hardship program or some other repayment program. In February 2015 – three months before the SOR was issued – an agreement was reached with Applicant making monthly payments of $66 by automatic electronic transfer. Monthly transfers have been made.

$655

For Applicant

Credit Card Debt

Admitted

—

1.c

This is a state income tax lien in the amount of $11,490 filed in August 2010 because of Applicant’s failure to pay his income tax for an unspecified period believed to be tax year 2009. Applicant enrolled in an installment agreement with the state department of revenue under which he agreed to make monthly payments of $325 until the balance was paid off. Applicant made the monthly payments during the course of the agreement, and on December 12, 2013 – approximately 18 months before the SOR was issued – the balance was paid off to the satisfaction of the state. Despite the resolution of the debt, Applicant’s March 2015 credit report continues to erroneously reflect that the lien remains unpaid and not released or settled. Nevertheless, despite the possibility that the lien may not have been released, or possible incorrect reporting, the account has been resolved.

$11,490

For Applicant

Tax Unpaid

Admitted

—

1.d

This is a federal income tax lien in the amount of $28,451 filed by the Internal Revenue Service (IRS) in August 2011 because of Applicant’s failure to pay his income taxes, penalties, and interest for tax years 2009 ($10,902.39) and 2010 ($17,549.42). Applicant approached the IRS in April 2010 in an effort to obtain a direct debit installment agreement. He also made a payment of $2,800. Under that agreement, Applicant initially agreed to make monthly payments of $600 by automatic electronic transfer until the balance was paid off. In June 2011, the installment agreement had to be modified to $250 per month because of the family layoffs. The monthly $600 payments were routinely made from July 2010 through May 2011. The monthly $250 payments were routinely made from August 2011 through April 2013. In June 2013, the payments were reduced again to $100 per month with an understanding that they would increase to $325 in May 2014. The monthly payments were routinely made during that entire period. Applicant paid $6,600 to the IRS between July 2010 and July 2011; $2,750 between July 2011 and July 2012; $2,600 between July 2012 and July 2013; $1,650 between July 2013 and July 2014; and $3,900 between July 2014 and July 2015. The monthly payments are continuing. While the tax liens are still in place, it is clear that, since April 2010 – over five years before the SOR was issued – Applicant has been in the process of resolving the account.

$28,451

For Applicant

Tax Unpaid

Admitted

—

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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

FOOTNOTES