ISCR Case No. 25-00649

___________ ___________ DEPARTMENT OF WAR DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: Applicant for Security Clearance ) ) ) ) ) ISCR Case No. 25-00649 Appearances For Government: Sakeena Farhath, Esq., Department Counsel For Applicant: Pro se 04/02/2026 Decision HARVEY, Mark, Administrative Judge: Guideline F (financial considerations) security concerns are not mitigated. Eligibility for access to classified information is denied. Statement of the Case On April 28, 2022, Applicant completed an Electronic Questionnaire for Investigations Processing (e-QIP) or security clearance application (SCA). (Government Exhibit (GE) 1) On July 23, 2025, the Defense Counterintelligence and Security Agency (DCSA) issued a statement of reasons (SOR) to Applicant under Executive Order (Exec. Or.) 10865, Safeguarding Classified Information within Industry (February 20, 1960); Department of Defense (DOD) Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive) (January 2, 1992), as amended; and Security Executive Agent Directive 4, establishing in Appendix A, the National Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive Position (AGs), effective June 8, 2017. (Hearing Exhibit (HE) 1) The SOR detailed reasons why DCSA did not find under the Directive that it is clearly consistent with the interests of national security to grant or continue a security clearance for Applicant and said his case will be submitted to an Administrative Judge for

a determination as to whether to grant, deny, or revoke his security clearance. Specifically, the SOR set forth security concerns arising under Guideline F. (HE 1) On July 24, 2025, Applicant responded to the SOR. (HE 2) This decision was delayed when all administrative judges were furloughed from October 1 through November 12, 2025, during a federal government shutdown due to a lapse in federal funding. On December 1, 2025, the case was assigned to me. On December 11, 2025, DOHA issued a notice scheduling the hearing for January 28, 2026. (HE 3) The hearing was held as scheduled, using the Microsoft Teams video teleconference system. During the hearing, Department Counsel offered eight exhibits; Applicant did not offer any exhibits; and all proffered exhibits were admitted into evidence without objection. (Tr. 11-12, 15-17; GE 1-GE 8) On February 10, 2026, DOHA received a copy of the transcript. Applicant provided one post-hearing exhibit, which was admitted into evidence. (Applicant Exhibit (AE) A (email and four pages)) The record closed on March 30, 2026. (Tr. 31, 58, 61) Some details were excluded to protect Applicant’s right to privacy. Specific information is available in the cited exhibits and transcript. Findings of Fact In Applicant’s SOR response, he admitted the allegations in SOR ¶¶ 1.c and 1.d, and he denied the allegations in SOR ¶¶ 1.a and 1.b. (HE 2) He also provided extenuating and mitigating information. His admissions are accepted as findings of fact. Applicant is a 42-year-old software engineer employed by a Department of War (DoW) contractor for almost four years. (Tr. 6, 18) In 2001, he graduated from high school. (Tr. 6) He has two years of college; however, he has not received a degree. (Tr. 7) His current major is computer science. (Tr. 7) He has been married three times, and his current marriage was in 2021. (Tr. 7-8) His four children are ages 3, 11, 13, and 21. (Tr. 8) He and his current spouse have custody of the three minor children. (Tr. 8) Financial Considerations Applicant and his spouse had some financial difficulties. (Tr. 35) His spouse was unemployed from 2022 to 2023, and Applicant “went from a $70,000 a year job down to a $13 an hour job for a little while” until he started working for his current employer. (Tr. 35, 40) They sold t heir home and moved to a different state; however, they did not receive as much for their home as they hoped. (Tr. 36) Applicant had some medical debts. (Tr. 55) In around February of 2025, Applicant’s annual pay increased from about $92,000 to $124,000. (Tr. 42-43) His spouse’s annual income is about $55,000. (Tr. 46) They have about $1,500 in their savings account and $1,600 in their checking account. (Tr. 45) He has about $32,000 in a 401(k) account. (Tr. 52) Their payment plan is to pay off their three vehicle loans and then address credit card and other debts. (Tr. 54) SOR ¶¶ 1.a and 1.b allege Applicant failed to timely file federal income tax (FIT) and state income tax (SIT) returns for tax years (TYs) 2018, 2020, and 2021, respectively. 2

On Applicant’s April 28, 2022 SCA, he responded to questions about filing and paying his FIT and SIT. (GE 1 at 38-39) He disclosed that he failed to file his TY 2018 FIT return. He said he filed his TY 2020 and 2022 FIT and SIT returns. He estimated he owed $2,000 for TY 2018 and $780 for TY 2022. (GE 1 at 38) He said he is working on getting them filed soon, and he plans to pay them by the end of year. (GE 1 at 39) Applicant’s September 25, 2025 IRS tax transcripts for TY 2018 and 2020 indicate no tax return filed for those two tax years. (GE 2) He did not submit an IRS tax transcript for TY 2021 with the other IRS tax transcripts from September 25, 2025. (GE 2) His September 18, 2022 IRS tax transcript shows no tax return filed for TY 2021. Applicant said he timely filed his TY 2021 FIT return. (Tr. 19, 21) The delay in filing this FIT return was due to identity theft, and he had to refile it. (Tr. 19) The IRS processed his FIT return on October 31, 2022. (Tr. 19) He believed the tax preparer also filed his SIT return for TY 2021. (Tr. 28) For a time, Applicant increased the withholding from his pay by $200 to address a FIT debt. (Tr. 37) He did not indicate the date his withholding increased. Applicant provided documents dated April 6, 2022, and January 30, 2026, from his tax preparer, which showed his FIT and SIT returns for TYs 2018, 2020, and 2021. This information is shown in the following table. (AE A) His October 7, 2025 IRS tax transcript provided the information for TY 2021. (GE 7) His April 25, 2025 IRS tax transcript provided the information for TY 2022. (GE 2) For TY 2021, Applicant filed as a married taxpayer, and for TY 2022, Applicant filed as a single taxpayer. (GE 2; GE 7) Adjusted gross income, when available, is rounded to the nearest $1,000 and taxes are rounded to the nearest $100. Tax Year Date Tax Return Prepared & Sent Adjusted Gross Income Taxe Owed (O) Tax Refund (R) Exhibit 2018-Federal Jan. 30, 2026 $65,000 O-$200 AE A at 5 2018-State Not Available 2020-Federal Jan. 30, 2026 $73,000 R-$2,900 AE A at 4 2020-State Jan. 30, 2026 $73,000 R-$200 AE A at 4 2021-Federal Apr. 18, 2022 $139,000 R-$0 GE 7 2022-Federal Apr. 6, 2022 $93,000 O-$4,000 GE 2; AE A at 3 2022-State Apr. 6, 2022 $93,000 R-$900 AE A at 3 Applicant’s October 7, 2025 IRS tax transcript said $4,300 was transferred from his tax refund for TY 2023 to pay taxes for TY 2022 resulting in a current $0 balance for TY 2022. (GE 7) SOR ¶¶ 1.c and 1.d allege Applicant has charged-off debts owed to a bank for about $1,680 and to another creditor for about $324 respectively. Applicant said he telephoned the two creditors on numerous occasions and asked for a letter stating that 3

he owed them a specific amount; however, they did not provide a letter. (Tr. 32) Other creditors provided letters, and he paid those creditors. (Tr. 32) Applicant did not recognize the two SOR debts. (Tr. 33, 35) He clicked a button on the Internet saying he disputed the debts, and he did not provide the reason for the dispute to the credit bureau report (CBR). (Tr. 33-34) He disputed the debts on his CBR, and the CBR said the debts were substantiated. (Tr. 33) Applicant’s January 21, 2026 CBR indicates 22 satisfactory accounts and 2 delinquent or derogatory accounts. (GE 8 at 1) The two delinquent accounts are those indicated in SOR ¶¶ 1.c and 1.d. Policies The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of War or his designee to grant applicant eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable. The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. Thus, nothing in an unfavorable decision should be construed to suggest that it is based on any express or implied determination about an applicant’s allegiance, loyalty, or patriotism. An unfavorable decision is merely an indication the applicant has not met the strict guidelines the President, Secretary of War, and Director of National Intelligence have established for issuing a clearance. 4

Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996). Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his [or her] security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). Analysis Financial Considerations AG ¶ 18 articulates the security concern for financial problems: Failure to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness, and ability to protect classified or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. The Appeal Board explained the scope and rationale for the financial considerations security concern in ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted) as follows: This concern is broader than the possibility that an applicant might knowingly compromise classified information to raise money in satisfaction of his or her debts. Rather, it requires a Judge to examine the totality of an applicant’s financial history and circumstances. The Judge must consider pertinent evidence regarding the applicant’s self-control, judgment, and other qualities essential to protecting the national secrets as well as the vulnerabilities inherent in the circumstances. The Directive presumes a 5

nexus between proven conduct under any of the Guidelines and an applicant’s security eligibility. AG ¶ 19 includes disqualifying conditions that could raise a security concern and may be disqualifying in this case: (a) inability to satisfy debts; (c) a history of not meeting financial obligations; and (f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required. The record establishes the disqualifying conditions in AG ¶¶ 19(a), 19(c), and 19(f), requiring additional inquiry about the possible applicability of mitigating conditions. Discussion of the disqualifying condition is contained in the mitigation section, infra. The financial considerations mitigating conditions under AG ¶ 20, which may be applicable in this case are as follows: (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or good judgment; (b) the conditions that resulted in the financial problem were largely beyond the person’s control (e.g., loss of employment, a business downturn, unexpected medical emergency, a death, divorce or separation, clear victimization by

predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances; (c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; (e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue; and (g) the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements. 6

The Appeal Board in ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013) explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows: Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b). SOR ¶¶ 1.a and 1.b allege Applicant failed to timely file FIT and SIT returns for TYs 2018, 2020, and 2021, respectively. Applicant timely filed his FIT and SIT returns for TY 2021, and he is credited with mitigating this portion of SOR ¶¶ 1.a and 1.b. AG ¶ 20(a) does not apply to the SOR issues. “It is also well established that an applicant’s ongoing, unpaid debts [and history of not timely filing tax returns] demonstrate a continuing course of conduct and can be viewed as recent for purposes of the Guideline F mitigating conditions.” ISCR Case No. 22-02226 at 2 (App. Bd. Oct. 27, 2023) (citing ISCR Case No. 15-06532 at 3 (App. Bd. Feb. 16, 2017)). AG ¶ 20(b) does not fully apply. Applicant cited identity theft as delaying the filing of his 2022 FIT return, and he receives credit for mitigating any late filing of this tax return. He did not assert any other circumstances partially or fully beyond his control, which caused him not to file his FIT and SIT returns for TYs 2018 and 2020. A willful failure to timely make (means complete and file with the IRS) a FIT return is a misdemeanor-level federal criminal offense. Title 26 U.S.C. § 7203, willful failure to file return or supply information, reads: Any person . . . required by this title or by regulations made under authority thereof to make a return, keep any records, or supply any information, who willfully fails to . . . make such return, keep such records, or supply such information, at the time or times required by law or regulations, shall, in addition to other penalties provided by law, be guilty of a misdemeanor. . . . A willful failure to make return, keep records, or supply information when required, is a misdemeanor offense without regard to the existence of any tax liability. Spies v. United States, 317 U.S. 492 (1943); United States v. Walker, 479 F.2d 407 (9th Cir. 1973); United S tates v. McCabe, 416 F.2d 957 (7th Cir. 1969); O’Brien v. United States, 51 F.2d 193 (7th Cir. 1931). For purposes of this decision, I am not considering Applicant’s failure to timely file his FIT returns against him as a crime. In regard to the failure to timely file his FIT returns, the Appeal Board has commented: 7

Failure to file tax returns suggests that an applicant has a problem with complying with well-established governmental rules and systems. Voluntary compliance with such rules and systems is essential for protecting classified information. ISCR Case No. 01-05340 at 3 (App. Bd. Dec. 20, 2002). As we have noted in the past, a clearance adjudication is not directed at collecting debts. See, e.g., ISCR Case No. 07-08049 at 5 (App. Bd. Jul. 22, 2008). By the same token, neither is it directed toward inducing an applicant to file tax returns. Rather, it is a proceeding aimed at evaluating an applicant’s judgment and reliability. Id. A person who fails repeatedly to fulfill his or her legal obligations does not demonstrate the high degree of good judgment and reliability required of those granted access to classified information. See, e.g., ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015). See Cafeteria & Restaurant Workers Union Local 473 v. McElroy, 284 F.2d 173, 183 (D.C. Cir. 1960), aff’d, 367 U.S. 886 (1961). ISCR Case No. 14-04437 at 3 (App. Bd. Apr. 15, 2016) (emphasis in original). See ISCR Case No. 15-01031 at 4 (App. Bd. June 15, 2016) (citations omitted); ISCR Case No. 14- 05476 at 5 (App. Bd. Mar. 25, 2016) (citing ISCR Case No. 01-05340 at 3 (App. Bd. Dec. 20, 2002)); ISCR Case No. 14-01894 at 4-5 (App. Bd. Aug. 18, 2015). The Appeal Board in ISCR Case No. 15-01031 (App. Bd. June 15, 2016) explained that in some situations, even if no taxes are owed when tax returns are not timely filed, grant of access to classified information is inappropriate. In ISCR Case No. 15-1031 (App. Bd. June 15, 2016), the applicant filed his 2011 FIT return in December 2013, his 2012 FIT return in September 2014, and his 2013 FIT return in October 2015. He received FIT refunds of at least $1,000 for each year. Nevertheless, the Appeal Board reversed the administrative judge’s decision to grant access to classified information. ISCR Case No. 24-02193 at 5 (App. Bd. Feb. 19, 2026) (citing ISCR Case No. 17- 01807 at 3-4 (App. Bd. Mar. 7, 2018)) said: The mere filing of delinquent tax returns or the existence of a payment arrangement with an appropriate tax authority does not compel a Judge to issue a favorable decision. As with the application of any mitigating condition, the Judge must examine the record evidence and decide whether the favorable evidence outweighs the unfavorable evidence, or vice versa. The timing of corrective action is an appropriate factor for the Judge to consider in the application of mitigating condition 20(g) as well as in considering aspects of other overlapping mitigating conditions, such as, in determining whether an applicant acted responsibly under the circumstances, whether an applicant’s past financial deficiencies are unlikely to recur, or whether an applicant initiated good-faith efforts to resolve financial problems. The Appeal Board clarified that even in instances where an “[a]pplicant has purportedly corrected [his or her] federal tax problem, and the fact that [applicant] is now motivated to prevent such problems in the future, does not preclude careful consideration 8

of [a]pplicant’s security worthiness in light of [his or her] longstanding prior behavior evidencing irresponsibility” including a failure to timely file FIT returns. See ISCR Case No. 15-01031 at 3 & n.3 (App. Bd. June 15, 2016) (characterizing “no harm, no foul” approach to an applicant’s course of conduct and employing an “all’s well that ends well” analysis as inadequate to support approval of access to classified information with focus on timing of filing of tax returns after receipt of the SOR). In this instance, Applicant failed to file, as required, FIT returns for TYs 2018 and 2020. At the time the record closed, Applicant had not provided documentation proving he filed his overdue tax returns. After his hearing, he provided a statement from his tax preparer indicating his FIT and SIT returns for TYs 2018 and 2020 were filed on January 30, 2026. AG ¶ 20(g) is not applicable. All required tax returns were filed before the record closed; however, this is not sufficient to fully mitigate SOR ¶¶ 1.a and 1.b. His overall handling of his taxes leaves lingering security concerns. See ISCR Case No. 24-02104 at 2 (App. Bd. Jan. 26, 2026) (affirming denial of security clearance and noting despite some mitigation under AG ¶ 20(g) that evidence as a whole did not support mitigation). In ISCR Case No. 06-10320 at 2 (App. Bd. Nov. 7, 2007), the Appeal Board said: The application of disqualifying and mitigating conditions and whole-person factors does not turn simply on a finding that one or more of them apply to the particular facts of a case. See, e.g., ISCR Case No. 01-14740 at 7 (App. Bd. Jan.15, 2003). Thus, the presence of some mitigating evidence does not alone compel the Judge to make a favorable security clearance decision. As the trier of fact, the Judge must weigh the evidence as a whole and decide whether the favorable evidence outweighs the unfavorable evidence, or vice versa. Non-Tax debts. Applicant has two charged-off debts totaling about $2,000. He asked the creditor to send him a letter indicating they owned the debt and the amount of the debt. This is a reasonable request. Applicant has 22 satisfactory accounts. He has a track record of paying his debts and maintaining his financial responsibilities. I am confident Applicant will pay these two debts once the required correspondence is provided. SOR ¶¶ 1.c and 1.d ar

e mitigated. Applicant did not prove that he was unable to make greater progress sooner in the filing of his overdue tax returns. Under all the circumstances, and considering the evidence “as a whole,” Applicant’s failures regarding his FITs and SITs are not mitigated. Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the Applicant’s conduct and all the circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(d): 9

(1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Under AG ¶ 2(c), “[t]he ultimate determination” of whether to grant a security clearance “must be an overall commonsense judgment based upon careful consideration of the guidelines” and the whole-person concept. My comments under Guideline F are incorporated in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline but some warrant additional comment. Applicant is a 42-year-old software engineer employed by a DoW contractor for almost four years. He has two years of college; however, he has not received a degree. His current major is computer science. The evidence supporting denial of Applicant’s security clearance is detailed in the financial considerations section, supra, and this evidence is more substantial than the evidence of mitigation. It is well settled that once a concern arises regarding an applicant’s security clearance eligibility, there is a strong presumption against granting a security clearance. See Dorfmont, 913 F. 2d at 1401. “[A] favorable clearance decision means that the record discloses no basis for doubt about an applicant’s eligibility for access to classified information.” ISCR Case No. 18-02085 at 7 (App. Bd. Jan. 3, 2020) (citing ISCR Case No.12-00270 at 3 (App. Bd. Jan. 17, 2014)). I have carefully applied the law, as set forth in Egan, Dorfmont, Exec. Or. 10865, the Directive, the AGs, and the Appeal Board’s jurisprudence to the facts and circumstances in the context of the whole person. Applicant failed to mitigate financial considerations security concerns. This decision should not be construed as a determination that Applicant cannot or will not attain the state of reform necessary for award of a security clearance in the future. With continued effort to establish and maintain his financial responsibility, he may well be able to demonstrate persuasive evidence of his security clearance worthiness. 10

___________________ Formal Findings Formal findings For or Against Applicant on the allegations set forth in the SOR, as required by Section E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraphs 1.a and 1.b: Subparagraphs 1.c and 1.d: Against Applicant For Applicant Conclusion I conclude that it is not clearly consistent with the interests of national security of the United States to grant or continue Applicant’s national security eligibility for access to classified information. Eligibility for access to classified information is denied. Mark Harvey Administrative Judge 11