Summary
A 50-year-old software configuration manager was denied a security clearance due to significant tax issues, falling under Guidelines E (Personal Conduct), F (Financial Considerations), and J (Criminal Conduct). The applicant failed to file and pay federal and state taxes for 3 to 4 years in the 1980s, and again from 1995 to 2004. This included not filing federal or state tax returns since 1995, leading to an IRS tax lien in 1995 and notices from both the IRS and a state Department of Revenue regarding outstanding taxes.
Specific allegations included an estimated IRS debt of $7,825.66 for the period ending 1996, and notices for taxes owed for the period ending 1999. The applicant paid approximately $8,000 toward his tax debt to prevent wage garnishment, but still had an estimated $23,000 remaining in overdue taxes, penalties, and interest. To address these debts, he took two loans against his 401(k) and financed $10,000 of his repayment from two credit cards.
Despite these efforts, the judge found insufficient mitigation. The applicant's repeated failure to file tax returns was deemed a pattern of dishonesty, lack of candor, and criminal violations of federal law. His procrastination and avoidance of tax obligations were considered willful, and his claims of anxiety did not excuse his lengthy history of non-compliance. Consequently, the security clearance was denied.
Why the Applicant Was Denied
- Applicant failed to file and pay taxes for multiple years, constituting a pattern of financial irresponsibility.
- The applicant's procrastination and avoidance of tax obligations were deemed willful and not mitigated by subsequent actions to resolve the debts.
- The applicant's claims of anxiety and avoidance issues did not excuse his lengthy history of non-compliance with tax laws.
Conditions Referenced
- E2.A6.1.2.1appliedA History of Not Meeting Financial Obligations
- E2.A6.1.2.2appliedDeceptive or Illegal Financial Practices Such as Embezzlement, Employee Theft, Check Fraud, Income Tax Evasion, Expense Account Fraud, Filing Deceptive Loan Statements, and Other Intentional Financial Breaches of Trust
- E2.A6.1.2.3appliedInability or Unwillingness to Satisfy Debts
- E2.A6.1.3.4rejectedThe Person Has Received or Is Receiving Counseling for the Problem and There Are Clear Indications That the Problem Is Being Resolved or Is Under ControlThe applicant did not seek professional help for his avoidance issues.
- E2.A6.1.3.6appliedThe Individual Initiated a Good-faith Effort to Repay Overdue Creditors or Otherwise Resolve DebtsThe applicant made some payments towards his tax debt but did not demonstrate a commitment to continue.
Key Rule Quoted
“No one has a right to a security clearance and the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.”
Procedural Posture
- SOR issuedMay 19, 2006
- Answer filedJun 15, 2006Supplemented on June 16, 2006
- Hearing heldNov 16, 2006
- Decision dateDec 29, 2006
Cite For
- Denial Based on a History of Tax Non-compliance Under Guideline F
- Impact of Personal Conduct on Security Clearance Eligibility Under Guideline E
- Criminal Conduct Implications Related to Financial Irresponsibility Under Guideline J