ISCR Case 02-02528.h1

Case Headnote

ISCR Case No. 02-02528.h1

deniedMar 3, 2003· Hon. Philip S. Howe· hearing

Summary

A 56-year-old senior engineer was denied a security clearance due to significant tax delinquencies and a pattern of failing to file required tax returns between 1992 and 2000. The applicant owed the Federal Internal Revenue Service approximately $670,000 for unpaid income taxes. These issues were cited under Guideline E (Personal Conduct), Guideline F (Financial Considerations), and Guideline J (Criminal Conduct).

The Statement of Reasons detailed the applicant's willful failure to file Federal and state tax forms for various years, leading to tax liens and a continued failure to file and pay taxes at least until August 2001. Additionally, the applicant deliberately failed to disclose these tax delinquencies and liens on the Security Clearance Questionnaire (SF86) in response to questions 36, 37, and 38.

The denial was based on the applicant's failure to file and pay taxes for multiple years, resulting in substantial liabilities. The judge found these actions to be willful, demonstrating a pattern of financial irresponsibility and dishonesty. The applicant also failed to provide credible evidence of efforts to resolve the tax issues or to engage a tax professional. The judge concluded that the applicant's actions demonstrated a lack of reliability and trustworthiness, which are essential for holding a security clearance.

Why the Applicant Was Denied

The applicant failed to file Federal and state income tax returns for multiple years, resulting in substantial tax liabilities.
The applicant's actions were deemed willful, demonstrating a pattern of financial irresponsibility and dishonesty.
The applicant did not provide credible evidence of efforts to resolve his tax issues or to hire a tax professional.

Conditions Referenced

Disqualifying

E2.A6.1.2.1raisedA History of Not Meeting Financial Obligations
E2.A6.1.2.2raisedDeceptive or Illegal Financial Practices Such as Income Tax Evasion
E2.A6.1.2.3raisedInability or Unwillingness to Satisfy Debts
E2.A5.1.2.2raisedThe Deliberate Omission, Concealment, Falsification or Misrepresentation of Relevant and Material Facts
E2.A5.1.2.4raisedPersonal Conduct or Concealment of Information That Increases Vulnerability to Coercion
E2.A10.1.2.1raisedAllegations or Admissions of Criminal Conduct
E2.A10.1.2.2raisedA Single Serious Crime or Multiple Lesser Offenses

Key Rule Quoted

“A decision to grant or continue an applicant's clearance may be made only upon an affirmative finding that to do so is clearly consistent with the national interest.”

Procedural Posture

SOR issuedOct 8, 2002
Answer filedNov 4, 2002
Hearing held—Decision based on written record.
Decision dateMar 3, 2003

Cite For

Denial Based on Significant Tax Liabilities Under Guideline F
Failure to File Tax Returns as a Disqualifying Condition Under Guideline E
Criminal Conduct Related to Tax Evasion Under Guideline J

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
2.a	Wilfully failing to file Federal tax forms for the years 1992 to 2000, wilfully failing to file state income tax forms for the years 1992 and 1996 to 2000, thereby causing a tax lien to be filed, and continuing not to file the required tax forms and pay the taxes at least until August 2001.	Against Applicant	Pattern of Dishonesty or Rule ViolationsFOUND DELIBERATE	—	Denied	(b) deliberately providing false information to an investigator or official (d) pattern of dishonesty, rule violations, or other untrustworthy behavior (e) personal conduct or concealment creating vulnerability to exploitation	—	—
2.b	Deliberately failing to reveal on the Security Clearance Questionnaire (SF86) questions 36, 37, 38 the tax delinquencies and tax liens you had incurred.	Against Applicant	Lack of Candor in InterviewFOUND DELIBERATE	—	Denied	(b) deliberately providing false information to an investigator or official (d) pattern of dishonesty, rule violations, or other untrustworthy behavior (e) personal conduct or concealment creating vulnerability to exploitation	—	—
2.c	Continuing not to file the required tax forms and pay the taxes at least until August 2001.	Against Applicant	Pattern of Dishonesty or Rule ViolationsFOUND DELIBERATE	—	Denied	(b) deliberately providing false information to an investigator or official (d) pattern of dishonesty, rule violations, or other untrustworthy behavior (e) personal conduct or concealment creating vulnerability to exploitation	—	—
2.d–1.e	2 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)	Against Applicant		—		—	—	—

Allegation

Finding

Conduct

Concealed Issue

Response

Disqualifying (¶16)

Mitigating applied (¶17)

Mitigation

2.a

Wilfully failing to file Federal tax forms for the years 1992 to 2000, wilfully failing to file state income tax forms for the years 1992 and 1996 to 2000, thereby causing a tax lien to be filed, and continuing not to file the required tax forms and pay the taxes at least until August 2001.

Against Applicant

Pattern of Dishonesty or Rule ViolationsFOUND DELIBERATE

—

Denied

(b) deliberately providing false information to an investigator or official

(d) pattern of dishonesty, rule violations, or other untrustworthy behavior

(e) personal conduct or concealment creating vulnerability to exploitation

—

2.b

Deliberately failing to reveal on the Security Clearance Questionnaire (SF86) questions 36, 37, 38 the tax delinquencies and tax liens you had incurred.

Against Applicant

Lack of Candor in InterviewFOUND DELIBERATE

—

Denied

(b) deliberately providing false information to an investigator or official

(d) pattern of dishonesty, rule violations, or other untrustworthy behavior

(e) personal conduct or concealment creating vulnerability to exploitation

—

2.c

Continuing not to file the required tax forms and pay the taxes at least until August 2001.

Against Applicant

Pattern of Dishonesty or Rule ViolationsFOUND DELIBERATE

—

Denied

(b) deliberately providing false information to an investigator or official

(d) pattern of dishonesty, rule violations, or other untrustworthy behavior

(e) personal conduct or concealment creating vulnerability to exploitation

—

2.d–1.e

2 sub-charges — specific text not stated in this decision (against the applicant). (low confidence)

Against Applicant

—

¶	Allegation	Finding	Type	Response	Disqualifying (¶19)	Mitigating applied (¶20)	Mitigation
1.a	Applicant has not filed or paid his Federal and state income tax returns for various years between 1992 to 2000. $670,000	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—
1.b	Applicant owes the Federal Internal Revenue Service approximately $670,000 for the unpaid income taxes. $670,000	Against Applicant	Tax Unpaid	Admitted	(a) inability to satisfy debts (b) unwillingness to satisfy debts regardless of ability (c) a history of not meeting financial obligations	—	—

Allegation

Finding

Type

Response

Disqualifying (¶19)

Mitigating applied (¶20)

Mitigation

1.a

Applicant has not filed or paid his Federal and state income tax returns for various years between 1992 to 2000.

$670,000

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

1.b

Applicant owes the Federal Internal Revenue Service approximately $670,000 for the unpaid income taxes.

$670,000

Against Applicant

Tax Unpaid

Admitted

(a) inability to satisfy debts

(b) unwillingness to satisfy debts regardless of ability

(c) a history of not meeting financial obligations

—

¶	Allegation	Finding	Offense	Criminal disposition	Response	Disqualifying (¶31)	Mitigating applied (¶32)	Mitigation
3.a	Willful failure to file federal individual income tax returns for various tax years between 1992 and 1999.	Against Applicant	Fraud or Deception Criminal	Conduct No Charge	Admitted	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—
3.b	Failure to file state individual income tax returns for those same years.	Against Applicant	Fraud or Deception Criminal	Conduct No Charge	Admitted	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—
3.c	Falsifying information on the Security Clearance Questionnaire regarding tax delinquencies and tax liens.	Against Applicant	Fraud or Deception Criminal	Conduct No Charge	Denied	(a) pattern of minor offenses casting doubt on judgment/reliability (b) evidence of criminal conduct, regardless of charge or conviction	—	—

Allegation

Finding

Offense

Criminal disposition

Response

Disqualifying (¶31)

Mitigating applied (¶32)

Mitigation

3.a

Willful failure to file federal individual income tax returns for various tax years between 1992 and 1999.

Against Applicant

Fraud or Deception Criminal

Conduct No Charge

Admitted

(a) pattern of minor offenses casting doubt on judgment/reliability

(b) evidence of criminal conduct, regardless of charge or conviction

—

3.b

Failure to file state individual income tax returns for those same years.

Against Applicant

Fraud or Deception Criminal

Conduct No Charge

Admitted

(a) pattern of minor offenses casting doubt on judgment/reliability

(b) evidence of criminal conduct, regardless of charge or conviction

—

3.c

Falsifying information on the Security Clearance Questionnaire regarding tax delinquencies and tax liens.

Against Applicant

Fraud or Deception Criminal

Conduct No Charge

Denied

(a) pattern of minor offenses casting doubt on judgment/reliability

(b) evidence of criminal conduct, regardless of charge or conviction

—

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Case Profile

Summary

Why the Applicant Was Denied

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