PSH-21-0094

*The original of this document contains information which is subject to withholding from disclosure
under 5 U.S. C. § 552. Such material has been deleted from this copy and replaced with XXXXXX’s.
United States Department of Energy
Office of Hearings and Appeals
In the Matter of: Personnel Security Hearing )
)
Filing Date: July 21, 2021 ) Case No.: PSH-21-0094
)
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Issued: October 21, 2021
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Administrative Judge Decision
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Janet R. H. Fishman, Administrative Judge:
This Decision concerns the eligibility of XXXX XXXX (the Individual) to hold an access
authorization under the United States Department of Energy’s (DOE) regulations, set forth at 10
C.F.R. Part 710, “Procedures for Determining Eligibility for Access to Classified Matter and
Special Nuclear Material.”1 As discussed below, after carefully considering the record before me
in light of the relevant regulations and the National Security Adjudicative Guidelines for
Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive
Position (June 8, 2017) (Adjudicative Guidelines), I conclude that the Individual’s access
authorization should not be restored.
I. Background
A DOE Contractor employs the Individual in a position that requires him to hold an access
authorization. As part of the security clearance process to maintain his clearance, the Individual
completed and signed a Questionnaire for National Security Positions on June 29, 2017, in which
the Individual admitted that he had failed to pay his 2011 federal and state income taxes. Ex. 7.
The Local Security Office (LSO) subsequently obtained a copy of the Individual’s credit report on
July 6, 2017. Ex. 5. Later, the Individual underwent an Enhanced Subject Interview (ESI)
conducted by an Office of Personnel Management (OPM) investigator on June 18, 2019. Ex. 8.
Based on the information provided, the LSO asked the Individual to complete a Letter of
Interrogatory (LOI), which he submitted on December 8, 2020. Ex. 6. In the LOI, the Individual
disclosed the fact that not only had he failed to satisfy his federal and state income tax obligations
for tax year 2011, but also for tax years 2010, 2012, 2013, 2014, 2015, 2016, 2017, and 2018. Ex.
6. Due to unresolved security concerns, the LSO began the present administrative review
proceeding by issuing a Notification Letter to the Individual. The Notification Letter informed the
1 The regulations define access authorization as “an administrative determination that an individual is eligible for access
to classified matter or is eligible for access to, or control over, special nuclear material.” 10 C.F.R. § 710.5(a). This
Decision will refer to such authorization as access authorization or security clearance.
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Individual that he was entitled to a hearing before an Administrative Judge to resolve the
substantial doubt regarding his eligibility to hold a security clearance. See 10 C.F.R. § 710.21.
The Individual requested a hearing, and the LSO forwarded the Individual’s request to the Office
of Hearings and Appeals (OHA). The Director of OHA appointed me as the Administrative Judge
in this matter. At the hearing I convened pursuant to 10 C.F.R. § 710.25(d), (e), and (g), the
Individual testified on his own behalf and submitted six exhibits, marked as Exhibits A through F
(hereinafter cited as “Ex.”). See Transcript of Hearing, Case No. PSH-21-0094 (hereinafter cited
as “Tr.”). The DOE Counsel presented the testimony of one witness and submitted eight exhibits,
marked as Exhibits 1 through 8.
II. Notification Letter and the Associated Security Concerns
Guideline F (Financial Considerations) provides that an individual’s 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.” Guideline F at ¶ 18. Under Guideline F, the LSO alleged that: 1) the Individual
owes $125,439 in unpaid income taxes to the Internal Revenue Service (IRS) for tax years 2010,
2011, 2014, 2015, and 2016; (2) the Individual owes $18,212.57 in unpaid taxes to his state of
residence for tax years 2011, 2012, 2013, 2016, 2017, 2018, and 2019; (3) an unpaid judgment
totaling $13,444 was filed against the Individual in 2012; (4) the IRS placed a lien against the
Individual’s property in 2014 for the nonpayment of his federal income taxes, and although he was
notified of the lien, he has failed to establish a payment plan; and (5) a judgement was filed against
the Individual in the amount of $9,542 in 2012 for the nonpayment of a veterinary bill, and
although the current amount owed has reached $13,444, the Individual has failed to establish a
payment plan. Ex. 1 at 1-2. Guideline F specifically states that an “inability to satisfy debts,” an
“unwillingness to satisfy debts regardless of the ability to do so,” “a history of not meeting
financial obligations,” and, a “failure to file . . . federal, state, or local income tax returns or failure
to pay [them] as required” are all potentially disqualifying conditions. Guideline F at ¶ 19(a)–(c),
(f). Accordingly, the LSO’s security concerns under Guideline F are justified.
III. Regulatory Standards
A DOE administrative review proceeding under Part 710 requires me, as the Administrative Judge,
to issue a decision that reflects my comprehensive, common-sense judgment, made after
consideration of all of the relevant evidence, favorable and unfavorable, as to whether the granting
or continuation of a person’s access authorization will not endanger the common defense and
security and is clearly consistent with the national interest. 10 C.F.R. § 710.7(a). The regulatory
standard implies that there is a presumption against granting or restoring a security clearance. See
Department of Navy v. Egan, 484 U.S. 518, 531 (1988) (“clearly consistent with the national
interest” standard for granting security clearances indicates “that security determinations should
err, if they must, on the side of denials”); Dorfmont v. Brown, 913 F.2d 1399, 1403 (9th Cir. 1990)
(strong presumption against the issuance of a security clearance).
The individual must come forward at the hearing with evidence to convince the DOE that granting
or restoring access authorization “will not endanger the common defense and security and will be
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clearly consistent with the national interest.” 10 C.F.R. § 710.27(d). The individual is afforded a
full opportunity to present evidence supporting his eligibility for an access authorization. The Part
710 regulations are drafted to permit the introduction of a very broad range of evidence at
personnel security hearings. Even appropriate hearsay evidence may be admitted. 10 C.F.R.
§ 710.26(h). Hence, an individual is afforded the utmost latitude in the presentation of evidence to
mitigate the security concerns at issue.
IV. Findings of Fact
In his June 29, 2017 QNSP, the Individual acknowledged that he had failed to pay his 2011 federal
income taxes, indicating that he was initially provided a refund before a subsequent audit revealed
he owed money, in the approximate amount of $130,000. Ex. 7 at 34-35. A lien was placed against
the Individual’s property in 2014 to satisfy this outstanding amount. Ex. 7 at 36. He also stated
that he owed an estimated $9,000 for failing to satisfy his 2011 state income taxes. With regard to
this debt, the Individual asserted that he had established a payment plan. Ex. 7 at 35. The Individual
did not provide any further information regarding his federal and state income tax returns in his
2017 QNSP.
During the investigation process, the Individual was confronted with the fact that he “failed to pay
federal taxes correctly for tax year 2011,” resulting in a delinquency of approximately $130,000
after an audit was conducted. Ex. 8 at 61. At the time of the ESI, the Individual indicated that he
was in the process of establishing a payment plan with the IRS to satisfy this delinquency, and that
he “now claims his taxes differently to ensure [he does not] experience financial difficulties again.”
Id. at 61. Not only did his 2011 income taxes remain unsatisfied at the time he completed his
December 2020 LOI, but he had also failed to establish a payment plan. Ex. 6 at 1-2. The foregoing
was also true of the delinquent state income tax. Ex. 6 at 3. In an attachment to the LOI, the
Individual further disclosed that he owes the IRS $46,257 for tax year 2010, $59,514 for tax year
2011,2 $7,621 for tax year 2014, $5,726 for tax year 2015, and $6,321 for tax year 2016. Ex. 6 at
19.3 Regarding his state income taxes, he stated in the LOI that he owed the state $4,775.70 for tax
year 2012, $3,38247 for tax year 2013, $314 for tax year 2016, $150 for tax year 2017, $210.75
for tax year 2018, and $379.65 for tax year 2019. Ex. 6 at 18.4
In the LOI, the Individual confirmed that the IRS placed a lien against his property in 2014 for the
nonpayment of taxes in the amount of $108,000. Ex. 6 at 4. This federal income tax debt was
incurred in either 2011 or 2012, as the Individual disagreed with the amount owed. Ex. 6 at 4-5.
2 This amount differs from the amount he reported on his 2017 QNSP. The Individual claimed in the attachment that
he disagreed with the audit and hired legal representation. Ex. 6 at 19.
3 The Individual submitted an unsigned “No-Nonsense Contract” with a tax service to evidence the fact that he had
retained their services. Ex. C. The Individual testified that he ultimately signed this document. Tr. at 16. He also
submitted an August 6, 2021, email exchange between his wife and a representative of a tax service, in which the
Individual’s wife asks for “a path forward to set up a payment plan with the IRS.” Ex. B. The Individual admitted that
this was the last communication he had with the tax group and stated that does not regularly “check in with them.” Tr.
at 23.
4 In an attachment to his request for an administrative review hearing, the Individual stated that he had satisfied all
delinquent state income taxes, having submitted an electronic check in the amount of $20,558.13 on April 20, 2021.
Ex. 2 at 1-2. Regarding his federal income taxes, the Individual repeatedly stated in the December 8, 2020, LOI that
he intended to establish a payment plan to resolve the matter of his outstanding federal income taxes. Ex. 6.
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Although he stated he hired an attorney to resolve the matter, the Individual could not provide
details regarding the status of the lien, except to say that it had not been satisfied. Ex. 6 at 5.
He was also confronted with the fact that a judgement was entered against him in the amount of
$9,542 for failing to pay for services rendered by a veterinarian, as he had disagreed with the stated
price of these services. Ex. 8 at 63. The judgement was entered in October 2012, and at the time
the Individual completed his LOI, the debt totaled $13,444. Ex. 5 at 3; Ex. 6 at 9-11. The Individual
submitted a filed Satisfaction of Judgment dated April 23, 2021, indicating that he had satisfied
the judgment against him and that the matter was dismissed with prejudice. Ex 2 at 3-4.
V. Hearing Testimony
At the hearing, the Individual testified that he had employed the services of a veterinarian in
conjunction with the management of his business, who he would occasionally pay in cash for
services rendered. Tr. at 10. The Individual further testified that, although the veterinarian received
payment in cash, he would continue to bill the Individual for this amount, resulting in a
disagreement over the amount owed. Tr. at 10. After negotiations over the debt failed, the
veterinarian filed a lawsuit against the Individual, resulting in a judgement against him when he
failed to appear for the court date. Tr. at 10-11. When asked if he understood that he had to pay
the judgement, the Individual said he “never got…a notice of payment[,]” and that the matter was
“forgotten over the years.” Tr. at 11. He did not seek any further information regarding the
judgement entered against him, because he “walked away [from the business] and [did not] want
to look back.” Tr. at 12. The Individual satisfied the judgment after the OPM investigator brought
the matter to his attention. Tr. at 11.
Regarding his state and federal income taxes, the Individual was audited in either 2013 or 2014
for the taxes he filed in 2011. Tr. at 13. He considered the amount the IRS indicated he owed for
tax year 2011 to be exorbitant, and further, he denied being given a reason for the audit and could
not recall an explanation for the discrepancy in the amount owed. Tr. at 13-14, 21. The Individual
retained an attorney in 2014 and asserted that it took the attorney “time” to file an Offer of
Compromise to settle the matter. Tr. at 14-15. When asked if the Individual retained the attorney
after he received a notice of lien from the IRS against his home, the Individual asserted that he
does not own a home, and that upon searching for a copy of the lien, he concluded that “there is
no lien.” Tr. at 16-17.
The Individual then went on to retain the services of a tax group in 2016. Tr. at 16, 18. When asked
what he did between 2016 and 2019 to address the matter of his outstanding taxes, the Individual
stated that he retained the tax group to “come up with some kind of payment plan, some kind of
agreement, some kind of this, some kind of that[]” to specifically address his federal taxes. Tr. at
18; Ex. C. As they failed to come to an agreement regarding his taxes, he received a notice of levy
on his income from the IRS. Tr. at 18; Ex. A. The Individual admitted that he has never made
direct contact with the IRS, and further, that he has not yet submitted a necessary form to the tax
group so that negotiations may continue with the IRS. Tr. at 19-20. He later stated that he failed to
satisfy his federal taxes because the IRS would have required him to fully satisfy the amount owed
for the first tax year he was delinquent before he could begin making payments on subsequent tax
years. Tr. at 21. He stated this was problematic because he did not have the ability to satisfy the
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outstanding amount for the first year he was delinquent. Tr. at 21. When he began communication
with the tax group in 2016, he believed the matter of his outstanding federal income taxes would
be resolved within a year, and when asked if he took any action when the matter was not resolved
within twelve months, he simply stated he was “still in communication years after with [the tax
group.]” Tr. at 23-24. However, the Individual did not provide any communication he received
from the IRS through the tax group. Tr. at 24. He attributed the delay in resolving the matter of his
outstanding taxes to the difficulties in establishing communication with the IRS, and further, he
stated that he stopped his endeavor to obtain his tax transcripts for the hearing, as it takes eight to
twelve days to process the request. Tr. at 24-25.5
Although the Individual submitted a payment receipt to evidence the fact that he had satisfied his
outstanding state income tax obligation, he did state that it took him until April 2020 to submit
payment because he “did not agree with the audit,” and that it took some time for counsel “to come
to a conclusion on how much [he] really owe[s].” Tr. at 20-21.
The Individual confirmed that he had obtained a loan in February 2020 for a recreational vehicle
in an amount exceeding $26,000. Tr. at 27; Ex. F at 4. The Individual did not find this loan
problematic despite his ongoing tax issues, because he was “paying the government for the levy,
and [it was his] intention…to come up with a…payment plan with the IRS.” Tr. at 27. The
Individual also secured a loan for $8,500 to satisfy the judgement against him and a second loan
of more than $26,000 for the purposes of purchasing a pontoon boat. Tr. at 27; Ex. F at 5-6.
VI. Analysis
The Adjudicative Guidelines provide that an Individual can mitigate security concerns under
Guideline F if:
(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
5 As the Individual had stated his intention to establish a payment plan to resolve the matter of his outstanding federal
income taxes in the December 2020 LOI, the Individual was asked what he had done to that end between December
2020 and August 2021, when his wife emailed the tax group. Tr. at 29. The Individual did not provide any specific
information regarding any actions taken between December 2020 and August 2021 concerning his outstanding federal
income taxes. Tr. at 29-30.
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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;
(f) the affluence resulted from a legal source of income; 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.
Adjudicative Guidelines at ¶ 20(a)-(g).
While the Individual satisfied the judgement against him and provided evidence of payment made
to resolve the matter of his outstanding state income taxes, I cannot conclude that the Individual
has mitigated Guideline F concerns, since he currently has unresolved federal tax debt. There is
no evidence that the Individual has established a payment plan with the IRS and is complying with
those arrangements. Not only has the Individual failed to file or pay his federal income taxes for
years, but there is scant evidence that the Individual took any meaningful actions to resolve the
matter. Although the Individual sought the assistance of the tax service in 2016, he could not
explain why virtually no action had been taken to resolve the matter of his outstanding taxes. The
only evidence the Individual submitted in this respect is an August 2021 email between his wife
and a representative of the tax service, asking for “a path forward” in their endeavor to establish a
payment plan with the IRS. Ex. B. This strongly indicates the Individual did not begin the process
of taking any definitive action to resolve the matter of his delinquent income taxes until August
2021, despite the assurances he had previously put forth in the LOI and voiced to the OPM
investigator. He further admitted that he had not yet completed the paperwork the tax service
requested of him to continue negotiations with the IRS.
Not only did he take these measures too late in the security process to successfully address the
concerns raised by his circumstances, but his delay casts serious doubt on his judgment. Despite
his repeated assurances that he would establish a payment plan to satisfy his outstanding federal
income taxes, the Individual could only provide reasons and justifications for his failure to take
prompt or substantive action. In fact, the Individual’s admitted lack of contact with the IRS and
his failure to reach out to the tax group to resolve the matter prior to August 2021 is a strong
indication of his reluctance to resolve the matter, and a seeming misunderstanding of his
continuing obligation to satisfy his income tax obligations. This conclusion is further confirmed
by the fact that the Individual secured two loans more than $26,000 each for the purpose of
purchasing a recreational vehicle and a pontoon boat. It is notable that the payments on the
aforementioned loans exceed $800 every month, money that he could be saving for payments on
his outstanding federal income taxes. Ex. F at 4, 6. Accordingly, the Individual has not
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successfully mitigated Guideline F concerns pursuant to ¶ 20(a) and (g). I need not address the
remainder of the mitigating factors, as they are not applicable in this case.
VII. Conclusion
For the reasons set forth above, I conclude that the LSO properly invoked Guideline F of the
Adjudicative Guidelines. After considering all the evidence, both favorable and unfavorable, in a
comprehensive, common-sense manner, including weighing all the testimony and other evidence
presented at the hearing, I find that the Individual has not brought forth sufficient evidence to
resolve the security concerns set forth in the Summary of Security Concerns. Accordingly, the
Individual has not demonstrated that restoring his security clearance would not endanger the
common defense and would be clearly consistent with the national interest. Therefore, the
Individual’s security clearance should not be restored. Either party may seek review of this
Decision by an Appeal Panel under the procedures set forth at 10 C.F.R. § 710.28.
Janet R. H. Fishman
Administrative Judge
Office of Hearings and Appeals