ISCR Case No. 25-01313

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__________ ______________ DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS

In the matter of: Applicant for Security Clearance ) ) ) ) ) ISCR Case No. 25

1313 Appearances For Government: Lauren Shure, Esq., Department Counsel For Applicant: Pro Se 08/10/2026 Decision HOGAN, Erin C., Administrative Judge: This case involves security concerns raised under Guideline F (Financial Considerations). Based on several mitigating factors, eligibility for access to classified information is granted. Statement of the Case Applicant submitted a security clearance application (SCA) on February 14, 2024. (GE 1) On February 5, 2026, the Defense Counterintelligence and Security Agency (DCSA) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. The DCSA acted under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense (DOD) Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) implemented by the DOD on June 8, 2017. On March 4, 2026, Applicant timely answered the SOR and requested a hearing before an administrative judge. Department Counsel forwarded the case to the DOHA Hearing Office o

April 8, 2026. The case was assigned to me on May 1, 2026. On May 14, 2026, a notice of hearing was issued scheduling the hearing on June 4, 2026, via video-teleconference. The hearing was held on that date. The Government offered four exhibits which were admitted in evidence as Government Exhibits (GE) 1 - 4 without

objection. Applicant offered three exhibits which were marked as Applicant Exhibits (AE) A - C, and admitted without objection. The transcript (Tr.) was received on June 15, 2026. Some details in the decision were excluded to protect Applicant’s right to privacy. Specific information is available in the cited exhibits. Findings of Fact Applicant, age 29, has been an employee of a government contractor since 2023 and is seeking a security clearance. This is his first time applying for a security clearance. He has an associate degree. He is single and has no children. (Tr. 16-17, GE 1) The SOR alleges that Applicant failed t o f ile federal income tax returns for tax years (TY) 2020 and 2021 (SOR ¶ 1.a: AE C at 1-2); that he failed to timely file federal income tax returns for TY 2019, 2022, and 2023 (SOR ¶ 1.b: GE 1 at 45-46; GE 2 at 10-11, 40- 51; GE 3 at 11); and he failed to timely file state income tax returns for TY 2019 through 2024. (SOR ¶ 1.c: GE 2 at 36-38; GE 3 at 11) Applicant admitted all the allegations in the SOR. On April 12, 2018, Applicant went motorcycle riding with a friend. The two decided to race each other on Interstate (I) 95. Applicant hit a guardrail while driving over 90 miles per hour (mph). He sustained serious injuries to his pelvis, both knees, his right ankle and his left hand. He was in the hospital for several months and then transferred to a rehabilitation facility. He was unable to walk and was in a wheelchair for almost nine months. He was unable to work. In 2019, he was approved for Social Security Disability Insurance (SSDI) which helped him cover some expenses. He was unemployed from April 2018 to April 2022. (Tr. 18-21; GE 1 at 19, 37; GE 2 at 10, 27) Upon his discharge from the rehabilitation facility, Applicant stayed with various friends until he was able to walk again. He was attending outpatient rehabilitation and was still unable to work. He said he was supposed to live with his father, but his father told him it was too much for him. (Tr. 19) As Applicant’s physical condition improved, he was able to fix dirt bikes in order to make extra money. The Covid-19 pandemic in 2020 set him back a little. He eventually took classes in order to be qualified to work in information technology (IT) believing it was the best option considering his physical limitations. He was initially hired by Company A. He worked there for 10 months and continued his job search. In August 2023, he was hired by his current employer, Company B, and has worked continuously for them on a full-time basis. (Tr. 19-21; GE 1) In Applicant’s response to the SOR, dated March 4, 2026, he admitted that he did not timely file his federal income tax returns for TY 2020 and 2021 (SOR ¶ 1.a) and TY 2019, 2022, and 2023. (SOR ¶ 1.b) In response to the allegation in SOR ¶ 1.c, he admitted that he did not timely file his state income tax returns for TY 2019, 2020 and 2021. He received SSDI during these tax years and did not understand that he was required to file 2

income tax returns during the period he received disability insurance payments. He denied that he failed to file his state income tax returns for TY 2022 through 2024. He has filed all federal and state income tax returns from 2019 to 2024. He was in the process of preparing his 2025 income return and indicated it would be filed on April 15, 2026. (Response to SOR) When Applicant began to file his late tax returns, he experienced some initial problems, but filed his 2019, 2020 and 2021 state and federal tax returns. He hired a tax professional to file his income tax returns for 2024. He filed his 2025 federal tax returns on his own. (Tr. 26 – 30) The status of Applicant’s federal income tax returns are: TY 2019: The return was received by the IRS on June 10, 2025, and processed on May 11, 2026. He did not owe a balance for TY 2019. (Tr. 21; GE 2 at 36; AE B at 2) TY 2020: The return was received by the IRS on March 2, 2026. He did not owe a balance on TY 2020, because he had no taxable income. (Tr. 26-27; AE A at 1; AE C at 1) TY 2021: The return was received by the IRS on March 2, 2026. He did not owe ta balance on TY 2021, because he had no taxable income for TY 2021. (Tr. 28-30; AE A at 2; AE C at 2) TY 2022: The return was received by the IRS on May 8, 2024, and processed on June 3, 2024. He received a refund of $474. (Tr. 28; AE C at 3) TY 2023: The return was received by the IRS on May 8, 2024, and processed on June 3, 2024.

e received a refund of $127. (Tr. 29; AE C at 5) TY 2024: The return was received by the IRS on March 3, 2025, and processed on April 15, 2025. He received a refund of $531. (Tr. 29; AE C at 6) TY 2025: The return was received by the IRS on April 15, 2026, and processed on April 20, 2026. He received a refund of $958. (Tr. 29; AE C at 7) Applicant provided a Letter of Good Standing from his state’s Department of Taxation, dated February 13, 2026. The letter indicates that upon review of his account, they found no outstanding assessments or delinquent notices on file. It did not include any audits or reviews that were in progress, or that were to be performed in the future. (AE D at 25) In a letter dated April 16, 2026, the state Department of Taxation provided copies of Applicant’s state tax returns. They noted that they did not find a state tax return for TY 2021. (AE D at 5) Applicant had filed the 2021 state tax return on February 23, 2026. The return was processed on April 21, 2026. (AE D at 6) All of Applicant’s state tax returns were filed. He either received a refund or did not earn enough money to owe taxes. (AE D) 3

Applicant admits that he should have taken the initiative and filed all of his tax returns before he applied for a security clearance. He was going through a lot, and he did not focus on filing his tax returns. He has learned that he should never put things off and let life defeat him. He intends to file his future income tax returns as soon as possible. (Tr. 32-33) Applicant describes his financial situation as “pretty good.” He has about $700 in checking. He took out a $6,500 loan in 2024. The loan has a current balance of $900 and is almost paid off. He refinanced his credit cards so he could get a cheaper rate and a lower monthly payment. The total balance of his credit cards is about $26,000. He purchased a car for $13,000 and is timely on his car payments. His retirement account has a balance of approximately $18,000. He still has health-related issues as a result of his April 2018 motorcycle crash. He works every day to get his body stronger in order to accommodate the injuries as best as he can. His employer provides good health insurance so he does not have a lot of medical bills. (Tr. 32-34) Policies “[N]o 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.” (Egan at 527). The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” (EO 10865 § 2) Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines 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 and 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 that 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 c

refund of $127. (Tr. 29; AE C at 5) TY 2024: The return was received by the IRS on March 3, 2025, and processed on April 15, 2025. He received a refund of $531. (Tr. 29; AE C at 6) TY 2025: The return was received by the IRS on April 15, 2026, and processed on April 20, 2026. He received a refund of $958. (Tr. 29; AE C at 7) Applicant provided a Letter of Good Standing from his state’s Department of Taxation, dated February 13, 2026. The letter indicates that upon review of his account, they found no outstanding assessments or delinquent notices on file. It did not include any audits or reviews that were in progress, or that were to be performed in the future. (AE D at 25) In a letter dated April 16, 2026, the state Department of Taxation provided copies of Applicant’s state tax returns. They noted that they did not find a state tax return for TY 2021. (AE D at 5) Applicant had filed the 2021 state tax return on February 23, 2026. The return was processed on April 21, 2026. (AE D at 6) All of Applicant’s state tax returns were filed. He either received a refund or did not earn enough money to owe taxes. (AE D) 3

Applicant admits that he should have taken the initiative and filed all of his tax returns before he applied for a security clearance. He was going through a lot, and he did not focus on filing his tax returns. He has learned that he should never put things off and let life defeat him. He intends to file his future income tax returns as soon as possible. (Tr. 32-33) Applicant describes his financial situation as “pretty good.” He has about $700 in checking. He took out a $6,500 loan in 2024. The loan has a current balance of $900 and is almost paid off. He refinanced his credit cards so he could get a cheaper rate and a lower monthly payment. The total balance of his credit cards is about $26,000. He purchased a car for $13,000 and is timely on his car payments. His retirement account has a balance of approximately $18,000. He still has health-related issues as a result of his April 2018 motorcycle crash. He works every day to get his body stronger in order to accommodate the injuries as best as he can. His employer provides good health insurance so he does not have a lot of medical bills. (Tr. 32-34) Policies “[N]o 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.” (Egan at 527). The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” (EO 10865 § 2) Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines 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 and 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 that 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 c

promise of classified information. Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” (EO 10865 § 7). Thus, a decision to deny a security clearance is merely an indication the applicant has 4

not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. 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. (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. ISCR Case No. 15-01253 at 3 (App. Bd. Apr. 20, 2016). Once the Government establishes a disqualifying conditio

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 burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. (ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005)) An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” (ISCR Case No. 01- 20700 at 3 (App. Bd. Dec. 19, 2002)). “[S]ecurity clearance determinat

ns should err, if they must, on the side of denials.” (Egan, 484 U.S. at 531; AG ¶ 2(b)) Analysis Guideline F: Financial Considerations The concern under this guideline is set out in AG