ISCR Case No. 25-00994

___________ ___________ DEFENSE LEGAL SERVICES AGENCY DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: Applicant for Security Clearance ) ) ) ) ) ISCR Case No. 25-00994 Appearances For Government: Troy L. Nussbaum, Esq., Department Counsel For Applicant: Pro se 08/13/2026 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 May 17, 2023, Applicant completed a security clearance application (SCA). (Government Exhibit (GE) 1) On December 9, 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 stated his case would be submitted to an Administrative Judge for a determination whether to grant, deny, or revoke his security clearance.

Specifically, the SOR set forth security concerns arising under Guideline F. (HE 1) On December 12, 2025, Applicant responded to the SOR and requested a hearing. (HE 2) On March 5, 2026, Department Counsel was ready to proceed. On April 2, 2026, the case was assigned to me. On April 8, 2026, DOHA issued a notice scheduling the hearing for June 3, 2026. (HE 3) The hearing was held as scheduled, using the Microsoft Teams video teleconference system. During the hearing, Department Counsel offered five exhibits; Applicant did not offer any exhibits; and all proffered exhibits were admitted into evidence. (Tr. 21-25, GE 1-GE 5) Applicant objected to admissibility of the two judgments because he said he made some payments or paid the judgments. (Tr. 23-24) He said the judgments were valid, and I overruled his objections, indicating the payments go to the weight of the judgments in the security clearance assessment. (Tr. 24-25) On June 15, 2026, DOHA received a copy of the transcript. The record was scheduled to close on August 3, 2026. (Tr. 78) I granted an extension, and on August 6, 2026, Applicant submitted 15 post-hearing exhibits, which were admitted into evidence without objection. (Applicant Exhibit (AE) A-AE O) The record closed on August 6, 2026. 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.a through 1.j, 1.l, and 1.m. (HE 2) He denied the allegations in SOR ¶¶ 1.k, 1.n, and 1.o. (HE 2) He also provided extenuating and mitigating information. Applicant is a 39-year-old superintendent, and he has been working for his current employer since December of 2021. (Tr. 6, 8-9) He received a general educational development (GED) diploma in about 2003 or 2004. (Tr. 6) He attended a community college for two semesters. (Tr. 6) He has not served in the military. (Tr. 6) He has never married, and he has four children, who are aged two months, and 2, 6, and 14 years. (Tr. 6-7) Applicant is engaged to be married, and his two youngest children are with his fiancé. (Tr. 7) He is paying child support for his two oldest children. (Tr. 7) Financial Considerations Applicant moved in with his parents to save money and to help his father who had hip and knee replacements. (Tr. 35-36) He recently moved out of his parent’s residence and moved in with his fiancé. (Tr. 35-36) His fiancé’s mother owns the home where he now lives. (Tr. 37) He has been engaged for about two years. (Tr. 37) His fiancé is a hairstylist. (Tr. 37-38) He does not know her annual income. (Tr. 38) He owns two vehicles, and the total monthly payments on the two vehicles are about $1,300 monthly. (Tr. 40-41) Applicant’s starting annual salary in 2021 was about $80,000, and his current annual salary is $120,000 plus $10,000 for his vehicle allowance. (Tr. 75) 2

Applicant said his delinquent debts resulted from “poor spending habits, buying stuff I didn’t need, just doing stupid stuff.” (Tr. 44) He has been unable to accumulate substantial savings due to month-to-month expenses, and his current bank account totals about $3,000. (Tr. 49) He intends to receive financial counseling and arrange a budget within a month or so of his hearing. (Tr. 45) SOR ¶ 1.a alleges, and Applicant admitted, he failed to timely file as required, Federal income tax (FIT) returns for tax years (TYs) 2010 through 2022. (HE 2) SOR ¶ 1.b alleges, and Applicant admitted, that he owes FIT for several TYs for about $3,000. (HE 2) SOR ¶¶ 1.c through 1.f allege, and Applicant admitted, that he owes FIT in the following approximate amounts: TY 2019 ($534); TY 2021 ($2,208); TY 2023 ($4,665); and TY 2024 ($3,746), respectively. (HE 2) SOR ¶ 1.g alleges, and Applicant admitted, that he failed to timely file as required, state income tax (SIT) returns for TYs 2010 through 2024. (HE 2) SOR ¶ 1.h alleges, and Applicant admitted, that he owes SIT for several TYs for about $1,000. (HE 2) Applicant’s July 7, 2023 Office of Personnel Management summary of interview states: Subject’s failure[s] to file federal taxes were discussed. Subject did not file tax [returns] from 2010 to 2020. Subject’s girlfriend did the paperwork and paid in one payment in May 2020. Subject paid 2021 taxes on time and filed for an extension for 2022 taxes in April 2023. Subject will file [his income tax returns] through [a tax relief service (TRS)]. (GE 2 at 3) On August 20, 2025, Applicant completed DOHA interrogatories, and he said he employed TRS to resolve his tax issues. (GE 2 at 9) He said that the IRS “may only require the last 4 years and have forgiven all previous years. Payment plan will be produced within [the] new few weeks.” (GE 2 at 10) He showed that from April 2025 to October 2025, he paid TRS $2,888, and he owed $1,165 to complete TRS’ contract. (GE 2 at 12) In 2025, the IRS informed Applicant of the status of his income tax returns for TYs 2021 through 2024: 2021 (filed 573 days after due date); 2022 (no return filed); 2023 (filed 294 days after due date); and 2024 (timely filed). (GE 2 at 17) The IRS said he owed the following amounts: 2019 ($534); 2021 ($2,205); 2023 ($4,628); and 2024 ($3,723). (GE 2 at 18) His September 5, 2025 IRS tax transcripts showed no tax returns filed for the following TYs: 2015; 2016; 2017; 2020; and 2022. (GE 2 at 19-29; AE C-AE J) The IRS tax transcripts showed TYs 2021, 2023, and 2024 FIT returns were filed. Id. Applicant said TRS filed all required FIT and SIT returns. (Tr. 51-52) He said he asked TRS to provide documentation showing his FIT and SIT returns were filed; however, he has not received a response. (Tr. 53) He was unsure if TRS had provided copies of the tax returns filed to Applicant. (Tr. 57) Applicant said the TRS told him that the IRS and SIT authority only wanted him to pay for taxes for “the previous three or four years of tax -- for me to pay, sorry, even 3

though the other years weren’t paid off. And this is for state and federal.” (Tr. 51) He did not provide correspondence from TRS, the IRS, or from the IRS website indicating this advice was correct. Applicant conceded he was irresponsible for not filing his tax returns. (Tr. 50) He had not made any payments to address his FIT and SIT debts at the time of his hearing because he was waiting for the TRS to give him the amount that the IRS and SIT authority wanted to resolve his tax debts. (Tr. 47, 55-59) Applicant submitted a post-hearing statement as follows: The IRS has established an installment agreement covering the tax periods identified in the enclosed correspondence. The most recent enclosed notice, dated July 22, 2026, reports a remaining balance of $12,437.79 and requires monthly payments of $217 beginning August 1, 2026. On July 31, 2026, I submitted the first $217 payment before the deadline. I understand that the federal tax balance remains outstanding and that penalties and interest may continue until it is paid. I intend to make every required payment on time, file future returns as required, and remain current with new tax obligations. Applicant provided proof of the $217 payment. (AE A) The installment agreement indicates the following tax debts are addressed: TY 2019 ($566); TY 2021 ($2,339); TY 2023 ($5,245); and 2024 ($4,288); and the tax debt totals ($12,437). (AE B) I note that the IRS is seeking payment of a TY 2019 tax debt, which is six years before the IRS installment letter, which is an indication that TRS’ comment about the IRS only being interested in the previous four years is incorrect. SOR ¶ 1.i alleges, and Applicant admitted, that he is indebted on an account that has been charged off in the approximate amount of $133. This debt is listed on his January 16, 2025 credit bureau report (CBR), which is the most recent CBR of record. (GE 4 at 2) SOR ¶¶ 1.j and 1.k allege that Applicant is indebted for two medical accounts placed for collection for about $543 and $525, respectively. Applicant said these two medical debts were paid; he disputed the negative entries in his credit report; and they are no longer in his credit report. (Tr. 66-67; GE 3 at 3) These two debts are not listed in his January 16, 2025 CBR. (GE 4) Applicant is credited with mitigation of these two accounts. SOR ¶ 1.l alleges, and Applicant admitted, that he is indebted on an account that has been charged off in the approximate amount of $12,033. Applicant said his vehicle was voluntarily repossessed about seven years ago. (Tr. 70) He said he recently contacted his bank; the bank advised him the account was closed, and the bank was not seeking collection on the account. (Tr. 70-71) This debt is not listed on his January 16, 2025 CBR. (GE 4) He is credited with mitigation of this debt. 4

SOR ¶¶ 1.m and 1.n allege Applicant is indebted on a judgment in 2022 f or about $3,511 and on a judgment in 2024 for about $5,184, respectively. The mother of his youngest child sought the judgments for items he removed when he left their residence and for attorney fees. (Tr. 72-75) He s aid he paid t he debt in SOR ¶ 1.n through garnishment of his wages. (Tr. 72) He is making payments on the second judgment. (Tr. 73) He is credited with mitigation of these two debts. SOR ¶ 1.o alleges Applicant owes about $3,995 in past-due child support obligations. His child support became delinquent because he was paying lawyer fees; he was unemployed for three months several years ago; the child support amount was increased; and the delinquency accumulated. (Tr. 62-63) He pays $1,364 monthly for child support for one child and $500 monthly for the other child. (Tr. 39) He voluntarily pays extra for the child with the $500 monthly child support. (Tr. 39-40) He said he is current on his child support responsibilities. (Tr. 61, 64) Applicant’s January 16, 2025 CBR shows the balance is $0 and the status is “pays as agreed.” (GE 4 at 3) After his hearing, he provided the following statement regarding his child support payments and his payments to address the judgments in SOR ¶¶ 1.m and 1.n: The enclosed [state] child-support records show total arrears of $0 and $0 owed to the [state tax authority]. I understand that I continue to have a current monthly support obligation, and I intend to keep that obligation current. The enclosed garnishment records also document [his employer’s] payroll deductions totaling $3,729.53 between September and October 2023 in connection with the [judgments in SOR ¶¶ 1.m and 1.n]. Applicant provided supporting documentation for this statement. (AE K-AE M) He is credited with mitigation of the debt in SOR ¶ 1.o. I asked Applicant to provide records from TRS showing the status of his tax filings and payments and from the state processing his child support payments to show the status of his child support debt. (Tr. 76, 78) He provided some additional records; however, he did not provide evidence that his tax returns were filed for the following TYs: 2015; 2016; 2017; 2020; and 2022. He did not provide documentation from the IRS or other credible source indicating it was unnecessary for him to file those five tax returns. Character Evidence A security officer at Applicant’s employment made a statement on his behalf. (Tr. 26-30) Applicant is a “stellar” employee who is diligent, reliable, responsible, trustworthy, and honest. (Tr. 29-30) A senior vice president of Applicant’s company stated: I am pleased to provide this character reference for [Applicant]. [He] has consistently demonstrated exceptional trustworthiness, reliability, and professionalism throughout his time with [his employer]. He is a dedicated 5

team member with a strong work ethic who can always be counted on to follow through on his commitments and represent the company in a positive manner. [Applicant] approaches his responsibilities with integrity, accountability, and attention to detail. His willingness to take ownership of challenges, support his teammates, and deliver quality results makes him a valuable asset to [his employer]. He has earned the respect of both his colleagues and clients through his consistent performance and professional demeanor. I highly recommend [Applicant] and am confident he will continue to be a positive contributor in any role he undertakes. (AE N) Another senior vice president of Applicant’s company stated: It is a privilege to provide this character reference for [Applicant], who has served [his employer] as a construction superintendent since December 14th, 2021. While his technical proficiency is undeniable, it is [his] unwavering integrity and strength of character that truly distinguishes him as a leader in our company. Throughout his tenure, I have witnessed [him] navigate the immense pressures of the construction environment with a moral compass that never wavers. He is a person of his word, with commitments to our clients that always followed through with absolute reliability. [Applicant] is what I call a “[the employer’s guy]” someone I can always count on. He also possesses a rare ability to lead through empathy and respect. In an industry where trust is the most valuable asset, [he] is an individual of the highest caliber. I recommend him without reservation for any role that can help support any classified projects. I truly believe he would be a great asset to support the mission. Please feel free to contact me at [the omitted email and phone numbers] if you wish to discuss his character any further. (AE O) 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 Defense 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 6

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 Defense, and Director of National Intelligence 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. 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. Sept. 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 7

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, 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 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 conditions 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 8

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. 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). Non-tax SOR debts. SOR ¶ 1.i alleges Applicant is indebted on an account that has been charged off in the approximate amount of $133. This debt is listed on his January 16, 2025 CBR, which is the most recent CBR of record. This debt is unresolved. SOR ¶ 1.j and 1.k allege Applicant is indebted for two medical accounts placed for collection in the approximate amount of $543 and $545, respectively. He said he paid the two debts, and they are not listed on his most recent CBR. He is credited with mitigation of these two accounts. SOR ¶ 1.l alleges Applicant is indebted on an account that has been charged off in the approximate amount of $12,033. Applicant said his vehicle was voluntarily repossessed about seven years ago. The creditor advised him the account was closed; the bank was not seeking collection on the account; and this debt is not listed on his most recent CBR. He is credited with mitigation of this debt because the debt is not recent. SOR ¶¶ 1.m and 1.n allege Applicant is indebted on a judgment in 2022 for about $3,511, and on a judgment in 2024 for about $5,184, respectively. He paid the debt in 9

SOR ¶ 1.n through garnishment of his wages. He is making payments on the second judgment through garnishment of his wages. He is credited with mitigation of these two debts. SOR ¶ 1.o alleges Applicant owes about $3,995 in past-due child support obligations. He is current on his child support responsibilities. His January 16, 2025 CBR shows the balance is $0 and the status is “pays as agreed.” (GE 4 at 3) He is compliant with state orders regarding his child support, which take into consideration his income and ability to pay. See ISCR Case No. 20-03457 3-4 (App. Bd. June 15, 2023) (discussing child support via income withholding orders (IWO), noting substantial reduction in arrearages over several years, and reversing denial of security clearance). Applicants are not required “to be debt-free in order to qualify for a security clearance. Rather, all that is required is that an applicant act responsibly given his or her circumstances and develop a reasonable plan for repayment, accompanied by ‘concomitant conduct’ that is, actions which evidence a serious intent to effectuate the plan.” ISCR Case No. 15-02903 at 3 (App. Bd. Mar. 9, 2017) (denial of security clearance remanded) (citing ISCR Case No.13-00987 at 3, n. 5 (App. Bd. Aug. 14, 2014)). There is no requirement that an applicant make payments on all delinquent debts simultaneously, nor is there a requirement that the debts alleged in the SOR be paid first. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). See also ISCR Case No. 23-01434 at 2-3 (App. Bd. May 7, 2024). Applicant responsibly handled and showed good faith in his overall handling and resolution of the majority of his non-tax SOR debts. AG ¶ 20(d) applies, and the debts in SOR ¶¶ 1.i through 1.o are mitigated. SOR tax issues. SOR ¶ 1.a alleges, and Applicant admitted, he failed to timely file as required, FIT returns for TYs 2010 through 2022. SOR ¶ 1.b alleges, and he admitted, that he owes FIT for several TYs for about $3,000. SOR ¶¶ 1.c through 1.f allege, and he admitted, he owes FIT in the following approximate amounts: TY 2019 ($534); TY 2021 ($2,208); TY 2023 ($4,665); and TY 2024 ($3,746), respectively. SOR ¶ 1.g alleges, and he admitted, that he failed to timely file as required, SIT returns for TYs 2010 through 2024. SOR ¶ 1.h alleges, and he admitted, he owes SIT for several TYs for about $1,000. Applicant provided proof of a $217 payment in July 2026 in accordance with his 2026 IRS installment agreement, which indicates the following tax debts are addressed: TY 2019 ($566); TY 2021 ($2,339); TY 2023 ($5,245); and 2024 ($4,288). FIT debts for these four TYs total ($12,437). AG ¶ 20(a) does not apply to the SOR tax debts allegations. “It is also well established that an applicant’s ongoing, unpaid debts [and history of not timely filing tax returns and paying taxes when due] 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)). 10

AG ¶ 20(b) does not fully apply. Applicant disclosed a three-month period of unemployment, which is a circumstance beyond his control; however, Applicant said his delinquent debts resulted from “poor spending habits, buying stuff I didn’t need, just doing stupid stuff.” (Tr. 44) He did not assert good enough reasons or other circumstances partially or fully beyond his control, which caused him not to timely file and pay required FIT and SIT for such long periods of time. He did not prove that he acted reasonably under the circumstances in regard filing his FIT and SIT returns. 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 and file 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 States 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. Regarding the failure to timely file FIT returns, the Appeal Board has commented: 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). 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). 11

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. 15-01031 (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 tax year. Nevertheless, the Appeal Board reversed the administrative judge’s decision to grant access to classified information because the tax returns were not timely filed. In ISCR Case No. 23-02082 at 4 (App. Bd. June 23, 2026) the Appeal Board cited the timing of the applicant’s efforts to resolve final issues as being mostly after the SOR was issued. The Appeal Board said: We have long held that the timing of debt payments is relevant in evaluating an applicant’s case for mitigation, as an applicant who resolves financial problems after being placed on notice that [his or] her security clearance is in jeopardy may lack the judgment and self-discipline to follow rules and regulations over time or when there is no immediate threat to [his or] her own interests. On May 17, 2023, Applicant completed an SCA. On December 9, 2025, the DCSA issued an SOR. In 2026, he established an IRS installment agreement and made the first payment under this plan. The IRS installment agreement indicates the following tax debts are addressed: TY 2019 ($566); TY 2021 ($2,339); TY 2021 ($5,245); and 2024 ($4,288). His September 5, 2025 IRS tax transcripts showed no tax returns filed for the following TYs: 2015; 2016; 2017; 2020; and 2022. He said he was advised that he did not need to file tax returns for more than four years previously. He did not provide documentation from a credible source indicating this advice was correct. Taxpayers have an independent responsibility to timely file and pay their FIT and SIT, and the advice of TRS does not excuse or fully mitigate this responsibility. In ISCR Case No. 24-02193 at 5 (App. Bd. Feb. 19, 2026), the Appeal Board 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. 12

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 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). AG ¶ 20(g) is applicable. Applicant established a payment plan with the IRS, and he made the first payment under this IRS payment plan. The most recent CBR shows excellent financial responsibility. However, these positive actions are not sufficient to fully mitigate the tax issues alleged in SOR ¶¶ 1.a through 1.h. Applicant failed to withhold sufficient income or retain sufficient funds in other accounts to pay his FIT when due. Several FIT and SIT returns have not been filed. His overall handling of his FIT and SIT 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 the evidence was insufficient to establish full 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. Applicant failed to prove that he took sufficient timely, prudent, responsible, and good-faith actions regarding his FIT and SIT. His behavior over multiple years raises unmitigated questions about his reliability, trustworthiness, and ability to protect classified information. See ISCR Case No. 23-02412 at 3 (App. Bd. Sept. 9, 2025). Under all the circumstances, and considering the evidence “as a whole,” Applicant’s failures regarding his FIT and SIT issues in SOR ¶¶ 1.a through 1.h are not mitigated at this time. 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): 13

(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 39-year-old superintendent, and he has been working for his current employer since December of 2021. He received a GED diploma in about 2003 or 2004. He attended a community college for two semesters. I found Applicant to be a credible witness. Two senior vice presidents and a coworker lauded Applicant’s diligence, professionalism, trustworthiness, responsibility, and reliability. His character evidence supports approval of his access to classified information. The evidence supporting denial of Applicant’s security clearance is detailed in the financial considerations section, supra, and this evidence is more persuasive than the evidence of mitigation at this time. 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 with regard to his taxes, he may well be able to demonstrate persuasive evidence of his security clearance worthiness. 14

____________________ 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 through 1.h: Subparagraphs 1.i through 1.o: 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 15