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Summary

The Applicant, a 62-year-old Integration Manager employed by a defense contractor, faced issues under Guideline F (Financial concerns) and Guideline J (Criminal conduct) due to a history of failing to file Federal and state tax returns from 1996 to 2002, and continued procrastination in filing subsequent returns. The judge found that the Applicant's financial situation, despite being stable, did not mitigate the serious nature of his conduct, leading to a denial of his security clearance.

Under Guideline F (Financial Considerations) and Guideline J (Criminal Conduct), the Statement of Reasons alleged the following: The Applicant denied owing the Federal Government $136,000.00 in back taxes for the year 1996 (2.a). The Applicant denied owing a hospital $74.00 since 1999 (2.b). The Applicant denied owing a medical consultation group $199.00 since 1999 (2.c). The Applicant denied owing a medical consultation group $247.00 since 1999 (2.d). The Applicant denied owing an anesthesia group $880.00 since 1999 (2.e). The Applicant denied owing a creditor $416.00 for a judgment obtained in August 2001 (2.g). The Applicant denied owing his state taxing authority $28,411.67 for unpaid taxes (2.h). The Applicant failed to file his Federal tax return in a timely fashion for tax years 1996 and 2000 (1.a). The Applicant wilfully failed to file his state income tax returns in a timely fashion for the tax years 1996 through 2002 (1.b). The Applicant failed to file his state income tax returns in a timely fashion for the tax years 1997 (1.c). The Applicant failed to file his state income tax returns in a timely fashion for the tax years 1998 (1.d). The Applicant failed to file his state income tax returns in a timely fashion for the tax years 1999 (1.e). The Applicant failed to file his Federal tax return in a timely fashion for tax year 2001 (1.f). The Applicant failed to file his state income tax returns in a timely fashion for the tax years 2002 (1.g). The Applicant failed to file his Federal tax return in a timely fashion for tax year 2003 (1.h). The Applicant failed to file his Federal tax return in a timely fashion for tax year 2004 (1.i).

The judge denied the clearance. The government raised disqualifying conditions E2.A10.1.2.1, E2.A10.1.2.2, E2.A6.1.2.1, E2.A6.1.2.3. The decision turned on the following: The Applicant failed to file Federal and state tax returns in a timely manner from 1996 through 2002, only filing them in 2003 during a security clearance reinvestigation; The Applicant continued to file late returns for the 2003 and 2004 tax years, indicating a pattern of procrastination; The Applicant did not provide sufficient evidence of rehabilitation or understanding of the consequences of his actions.

Why the Applicant Was Denied

• The Applicant failed to file Federal and state tax returns in a timely manner from 1996 through 2002, only filing them in 2003 during a security clearance reinvestigation.
• The Applicant continued to file late returns for the 2003 and 2004 tax years, indicating a pattern of procrastination.
• The Applicant did not provide sufficient evidence of rehabilitation or understanding of the consequences of his actions.

Conditions Referenced

Key Rule Quoted

“The eligibility guidelines established in the DoD Directive identify personal characteristics and conduct which are reasonably related to the ultimate question of whether it is "clearly consistent with the national interest" to grant an Applicant's request for access to classified information.”

Procedural Posture

• SOR issuedMar 24, 2005
• Answer filedApr 19, 2005
• Hearing heldJul 13, 2005
• Decision dateNov 3, 2005

Cite For

• Failure to File Tax Returns as a Disqualifying Condition Under Guideline J
• Procrastination in Financial Matters as Indicative of Poor Judgment Under Guideline F
• Insufficient Evidence of Rehabilitation in Financial Conduct Leading to Security Clearance Denial.