ISCR Case 14-01365.h1

Case Headnote

ISCR Case No. 14-01365.h1

grantedJan 28, 2016· Hon. Wilford H. Ross· hearing

Summary

A 54-year-old defense contractor was granted a security clearance under Guideline F (Financial Considerations) despite initial concerns regarding several financial obligations. The applicant faced allegations including two outstanding IRS tax debts totaling $11,352 for 2010 and $13,180 for 2011, both of which had associated tax liens. Additionally, he owed $1,276 on a department store credit card and $1,411 for a delinquent telephone bill. A $1,026 medical bill was disputed, and he had failed to timely file his 2012 federal income tax return.

The applicant successfully resolved the IRS tax debts using income tax refunds from 2012, 2013, and 2014, leading to the release of both liens. He also provided proof of payment for the department store credit card and the delinquent telephone bill in December 2014. The 2012 tax return was subsequently filed after he learned it had not been received. The medical bill remained in dispute, with the applicant filing a dispute with credit reporting agencies.

The judge found that the applicant had resolved most of his debts and acted responsibly under challenging circumstances. His financial difficulties were attributed to a divorce and the unexpected custody of four minor grandchildren. The applicant demonstrated a good-faith effort to manage his financial obligations, leading to the ultimate decision to grant the security clearance.

Why the Applicant Prevailed

The applicant resolved all but one disputed debt and filed his overdue tax return.
The financial difficulties were largely due to circumstances beyond the applicant's control, including a divorce and taking custody of grandchildren.
The applicant demonstrated a good-faith effort to repay creditors and manage his financial obligations.

Conditions Referenced

Disqualifying

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

Mitigating

AG ¶ 20(a)appliedBehavior Happened so Long Ago, Was Infrequent, or Occurred Under Circumstances Unlikely to Recur
AG ¶ 20(b)appliedConditions That Resulted in Financial Problems Were Largely Beyond the Person's Control
AG ¶ 20(c)appliedClear Indications That the Problem Is Being Resolved or Is Under Control
AG ¶ 20(d)appliedInitiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
AG ¶ 20(e)appliedReasonable Basis to Dispute the Legitimacy of the Past-due Debt

Key Rule Quoted

“Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.”

Procedural Posture

SOR issuedOct 10, 2014
Answer filedNov 10, 2014
Hearing held—Decision made without a hearing.
Decision dateJan 28, 2016

Cite For

Mitigating Conditions Under Guideline F for Financial Difficulties
Impact of Personal Circumstances on Financial Obligations
Resolution of Debts as a Factor in Security Clearance Eligibility

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 admitted that he owed the Internal Revenue Service (IRS) $11,352 in back taxes for the 2010 tax year. A tax lien was filed for this year. Part of his income tax refund for 2013 was used to pay this debt in full and the IRS released the lien, as shown in documentation provided by Applicant. (Answer at 7-8.) This debt is resolved. $11,352	For Applicant	Tax Unpaid	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—
1.b	Applicant admitted that he owed the Internal Revenue Service (IRS) $13,180 in back taxes for the 2011 tax year. A tax lien was filed for this year. Parts of his income tax refunds for 2012, 2013, and 2014 were used to pay this debt in full and the IRS released the lien, as shown in documentation provided by Applicant. (Answer at 8; Applicant Exhibit A at 4-5, 51.) This debt is resolved. $13,180	For Applicant	Tax Unpaid	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—
1.c	Applicant admitted that he was indebted for a department store credit card in the amount of $1,276. Applicant showed proof of payment of this debt in December 2014. This debt is resolved. (Applicant Exhibit A at 41.) $1,276	For Applicant	Credit Card Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—
1.d	Applicant admitted that he was indebted for a delinquent telephone bill in the amount of $1,411. Applicant showed proof of payment of this debt in December 2014. This debt is resolved. (Applicant Exhibit A at 40.) $1,411	For Applicant	Utility or Phone Debt	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—
1.e	Applicant denied owing $1,026 for a delinquent medical bill. In his Answer Applicant stated he did not recognize the bill, which was merely identified by an account number and a statement it was medically related. Through research, Applicant was able to identify the particular medical provider and the date of the alleged service. Applicant has filed a dispute with the credit reporting agencies. (Applicant Exhibit A at 43.) This debt is in dispute. $1,026	For Applicant	Unspecified Financial	Denied	—	—	Claimed Debt Disputed with Creditor
1.f	Applicant admitted not filing his 2012 Federal income tax return in a timely fashion. He stated in his Answer that this was an error. He timely mailed the return and believed it had been received by the IRS. He did not know until receiving the SOR that it had not been received. He has since successfully filed that return, as shown in documentation from the IRS. (Applicant Exhibit A at 51.) This allegation is resolved.	For Applicant	Tax Filing Failure	Admitted	—	(b) conditions largely beyond the person’s control; acted responsibly (d) good-faith effort to repay or otherwise resolve debts	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant admitted that he owed the Internal Revenue Service (IRS) $11,352 in back taxes for the 2010 tax year. A tax lien was filed for this year. Part of his income tax refund for 2013 was used to pay this debt in full and the IRS released the lien, as shown in documentation provided by Applicant. (Answer at 7-8.) This debt is resolved.

$11,352

For Applicant

Tax Unpaid

Admitted

—

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

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

—

1.b

Applicant admitted that he owed the Internal Revenue Service (IRS) $13,180 in back taxes for the 2011 tax year. A tax lien was filed for this year. Parts of his income tax refunds for 2012, 2013, and 2014 were used to pay this debt in full and the IRS released the lien, as shown in documentation provided by Applicant. (Answer at 8; Applicant Exhibit A at 4-5, 51.) This debt is resolved.

$13,180

For Applicant

Tax Unpaid

Admitted

—

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

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

—

1.c

Applicant admitted that he was indebted for a department store credit card in the amount of $1,276. Applicant showed proof of payment of this debt in December 2014. This debt is resolved. (Applicant Exhibit A at 41.)

$1,276

For Applicant

Credit Card Debt

Admitted

—

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

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

—

1.d

Applicant admitted that he was indebted for a delinquent telephone bill in the amount of $1,411. Applicant showed proof of payment of this debt in December 2014. This debt is resolved. (Applicant Exhibit A at 40.)

$1,411

For Applicant

Utility or Phone Debt

Admitted

—

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

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

—

1.e

Applicant denied owing $1,026 for a delinquent medical bill. In his Answer Applicant stated he did not recognize the bill, which was merely identified by an account number and a statement it was medically related. Through research, Applicant was able to identify the particular medical provider and the date of the alleged service. Applicant has filed a dispute with the credit reporting agencies. (Applicant Exhibit A at 43.) This debt is in dispute.

$1,026

For Applicant

Unspecified Financial

Denied

—

Claimed

Debt Disputed with Creditor

1.f

Applicant admitted not filing his 2012 Federal income tax return in a timely fashion. He stated in his Answer that this was an error. He timely mailed the return and believed it had been received by the IRS. He did not know until receiving the SOR that it had not been received. He has since successfully filed that return, as shown in documentation from the IRS. (Applicant Exhibit A at 51.) This allegation is resolved.

For Applicant

Tax Filing Failure

Admitted

—

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

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

—

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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