ISCR Case 01-13613.h1

Case Headnote

ISCR Case No. 01-13613.h1

grantedMay 15, 2003· Hon. Darlene Lokey Anderson· hearing

Summary

A 54-year-old Senior Engineer employed by a defense contractor was granted a security clearance despite allegations under Guidelines E (Personal Conduct), F (Financial Considerations), and J (Criminal Conduct). The Statement of Reasons cited excessive indebtedness, including approximately $115,000 owed to the IRS for unpaid employment taxes from 1998, 1990, and 1993 through 2000, and a $5,400 judgment from a landlord. Additionally, the applicant failed to file federal income tax returns for tax years 1988, 1990, and 1993 through 2000, which was alleged to be a violation of Title 26, United States Code, Section 7203. The government also alleged intentional falsification of personal background information during the clearance screening process.

The judge found that the applicant's financial issues were largely due to tragic personal circumstances and a business downturn. The applicant demonstrated significant efforts to rectify his financial situation, including establishing an installment agreement with the IRS.

Crucially, there was no evidence of intentional concealment of information regarding the tax lien on his security clearance application. Based on these mitigating factors and the applicant's good faith efforts to resolve his obligations, the security clearance was granted.

Why the Applicant Prevailed

The applicant demonstrated a good faith effort to resolve his financial obligations, including an installment agreement with the IRS.
The applicant's past financial difficulties were largely attributed to circumstances beyond his control, including personal tragedies and a business downturn.
There was no evidence of intentional concealment of information regarding the tax lien on his security clearance application.

Conditions Referenced

Disqualifying

F.1raisedA History of Not Meeting Financial Obligations
J.1raisedAny Criminal Conduct Regardless of Whether the Person Was Formally Charged
E.1raisedIntentional Falsification of Material Aspects of Personal Background

Mitigating

F.3appliedThe Conditions That Resulted in the Behavior Were Largely Beyond the Person's Control
F.4appliedThe Person Has Received or Is Receiving Counseling for the Problem and There Are Clear Indications That the Problem Is Being Resolved or Is Under Control
F.6appliedThe Individual Initiated a Good Faith Effort to Repay Overdue Creditors or Otherwise Resolve Debts
J.5appliedThere Is Clear Evidence of Successful Rehabilitation

Key Rule Quoted

“The adjudicative process is an examination of a sufficient period of a person's life to make an affirmative determination that the person is an acceptable security risk.”

Procedural Posture

SOR issuedDec 12, 2002
Answer filedJan 21, 2003
Hearing heldMar 25, 2003
Decision dateMay 15, 2003

Cite For

Mitigation of Financial Considerations Under Guideline F Due to Personal Circumstances
Successful Rehabilitation Under Guideline J for Failure to File Tax Returns
Lack of Intentional Falsification Under Guideline E Regarding Security Clearance Application

Editorial summary generated for research. Not legal advice; not a prediction. Verify against the full decision before relying on any quoted language.

¶	Allegation	Finding	Conduct	Concealed Issue	Response	Disqualifying (¶16)	Mitigating applied (¶17)	Mitigation
3.a	The Government alleges that the Applicant is ineligible for clearance because he intentionally falsified material aspects of his personal background during the clearance screening process.	For Applicant	Falsification Security FormNOT DELIBERATE	Other	Denied	—	—	Claimed Explanation of Omission Credible

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

3.a

The Government alleges that the Applicant is ineligible for clearance because he intentionally falsified material aspects of his personal background during the clearance screening process.

For Applicant

Falsification Security FormNOT DELIBERATE

Other

Denied

—

Claimed

Explanation of Omission Credible

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	The Applicant is ineligible for clearance because he is financially overextended and at risk to engage in illegal acts to generate funds. $5,400	For Applicant	Unspecified Financial	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts (g) arrangements made with the tax authority; in compliance	Claimed Debt Paid in Full Documented Payment Plan with Creditor
1.b	The Applicant became indebted to the Internal Revenue Service in the total amount of approximately $115,000.00 (including accrued interest and penalties) for unpaid employment taxes for the years, 1998, 1990 and 1993 through 2000. $115,000	For Applicant	Tax Unpaid	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts (g) arrangements made with the tax authority; in compliance	Documented Payment Plan with IRS Claimed Debt Paid in Full
2.a	The Applicant failed to file his federal income tax returns for tax years 1988, 1990, and 1993 through 2000.	For Applicant	Tax Filing Failure	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts (g) arrangements made with the tax authority; in compliance	Claimed Financial Counseling Documented Rehabilitation Evidence
3.a	The Applicant has a judgment entered against him by the landlord in the amount of approximately $5,400.00. $5,400	For Applicant	Judgment Against Applicant	Denied	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability	(c) received/receiving counseling; problem being resolved (d) good-faith effort to repay or otherwise resolve debts (g) arrangements made with the tax authority; in compliance	Claimed Debt Paid in Full Documented Payment Plan with Creditor

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

The Applicant is ineligible for clearance because he is financially overextended and at risk to engage in illegal acts to generate funds.

$5,400

For Applicant

Unspecified Financial

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) received/receiving counseling; problem being resolved

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

(g) arrangements made with the tax authority; in compliance

Claimed

Debt Paid in Full

Documented

Payment Plan with Creditor

1.b

The Applicant became indebted to the Internal Revenue Service in the total amount of approximately $115,000.00 (including accrued interest and penalties) for unpaid employment taxes for the years, 1998, 1990 and 1993 through 2000.

$115,000

For Applicant

Tax Unpaid

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) received/receiving counseling; problem being resolved

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

(g) arrangements made with the tax authority; in compliance

Documented

Payment Plan with IRS

Claimed

Debt Paid in Full

2.a

The Applicant failed to file his federal income tax returns for tax years 1988, 1990, and 1993 through 2000.

For Applicant

Tax Filing Failure

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) received/receiving counseling; problem being resolved

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

(g) arrangements made with the tax authority; in compliance

Claimed

Financial Counseling

Documented

Rehabilitation Evidence

3.a

The Applicant has a judgment entered against him by the landlord in the amount of approximately $5,400.00.

$5,400

For Applicant

Judgment Against Applicant

Denied

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) received/receiving counseling; problem being resolved

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

(g) arrangements made with the tax authority; in compliance

Claimed

Debt Paid in Full

Documented

Payment Plan with Creditor

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
2	The Government alleges that the Applicant is ineligible for clearance because he violated the misdemeanor provisions of Title 26, United States Code, Section 7203, by failing to file annual income tax returns, as required.	For Applicant	Fraud or Deception Criminal	Conduct No Charge	Denied	—	(d) evidence of successful rehabilitation (time, restitution, employment, etc.)	—
2.a	As previously discussed, the Applicant failed to file his 1988, 1990, and 1993 through 2000, Federal Income Tax Returns within the time required. His failure to file his Federal income tax returns was in violation of Title 26, United States Code, Section 7203.	For Applicant	Fraud or Deception Criminal	Conduct No Charge	Denied	—	(d) evidence of successful rehabilitation (time, restitution, employment, etc.)	—

Allegation

Finding

Offense

Criminal disposition

Response

Disqualifying (¶31)

Mitigating applied (¶32)

Mitigation

The Government alleges that the Applicant is ineligible for clearance because he violated the misdemeanor provisions of Title 26, United States Code, Section 7203, by failing to file annual income tax returns, as required.

For Applicant

Fraud or Deception Criminal

Conduct No Charge

Denied

—

(d) evidence of successful rehabilitation (time, restitution, employment, etc.)

—

2.a

As previously discussed, the Applicant failed to file his 1988, 1990, and 1993 through 2000, Federal Income Tax Returns within the time required. His failure to file his Federal income tax returns was in violation of Title 26, United States Code, Section 7203.

For Applicant

Fraud or Deception Criminal

Conduct No Charge

Denied

—

(d) evidence of successful rehabilitation (time, restitution, employment, etc.)

—

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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

CONCLUSION

FORMAL FINDINGS

DECISION

FOOTNOTES