PSH-23-0055

*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: February 1, 2023 ) Case No.: PSH-23-0055
)
__________________________________________)
Issued: June 22, 2023
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Administrative Judge Decision
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Brenda B. Balzon, Administrative Judge:
This Decision concerns the eligibility of XXXXXXXXXXXXX (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 a security
clearance. In May 2022, the Individual completed a Questionnaire for National Security Positions
(QNSP). Exhibit (Ex.) 6. In the QNSP, the Individual disclosed that he failed to file his Federal
and State personal income tax returns for the 2016–2021 tax years. Ex. 6 at 34–36.
On June 24, 2022, the Individual underwent an Enhanced Subject Interview (ESI) with an
investigator from the Office of Personnel Management (OPM).2 Ex. 7 at 56. During the ESI, the
Individual told the OPM investigator that he failed to file his yearly Federal and State personal
income taxes, from 2016 to 2021, because he lost “some income Statements from stock dividends
and was waiting for replacements when he forgot about it.” Id. at 57. The Individual also told 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.”
2 Numerous exhibits offered by DOE contain documents with printed page numbers that are inconsistent with the
pagination of the exhibits. This Decision cites to pages in the order in which they appear in exhibits without regard
for their internal pagination.
investigator that he was “currently working on” his taxes and planned on filing the returns “within
the next few weeks.” Id.
Subsequently, the Local Security Office (LSO) asked the Individual to complete a Letter of
Interrogatory (LOI), which the Individual completed on November 1, 2022. Ex. 5. In his LOI, the
Individual reported that he had not filed his Federal and State personal income tax returns from
2016 to 2021. Id. at 1. He reported he did not file taxes for these years because he “lost a piece of
info for the first year and had to request a replacement document, and the process just kinda [sic]
fell off [his] radar.” Id. at 3. He also reported that he has “learning disabilities” and “tax forms are
harder to read [than] most other government documents [he has] to deal with.” Id. He stated that
he was “still working on gathering and sorting all the info for all these years” and he “[s]hould be
close to being able to [file].” Id. at 1. He also reported that he does not owe taxes for the years he
did not file as he did not claim exemptions for the years 2016–2021, and he stated that he received
a notice from the Internal Revenue Service (IRS) indicating that he should have refunds available.
Id. at 1–2.
Due to unresolved security concerns stemming from the Individual’s disclosures, the LSO
informed the Individual, in a Notification Letter dated January 4, 2023, that it possessed reliable
information that created substantial doubt regarding the Individual’s eligibility to hold a security
clearance. In an attachment to the letter entitled Summary of Security Concerns (SSC), the LSO
explained that the derogatory information raised security concerns under Guideline F of the
Adjudicative Guidelines. Ex. 1.
The Individual exercised his right to request an administrative review hearing pursuant to 10
C.F.R. Part 710. Ex. 2. The Director of the Office of Hearings and Appeals (OHA) appointed me
as the Administrative Judge in this matter, and I subsequently conducted an administrative review
hearing. The LSO submitted seven numbered exhibits (Exs. 1–7) into the record and did not call
any witnesses at the hearing. The Individual submitted seven lettered exhibits (Exs. A through G)
into the record and testified on his own behalf. See Transcript of Hearing (hereinafter cited as
“Tr.”).
II. NOTIFICATION LETTER AND THE ASSOCIATED SECURITY CONCERNS
As indicated above, the Notification Letter informed the Individual that information in the
possession of the DOE created a substantial doubt concerning his eligibility for a security
clearance. The LSO cited Guideline F (Financial Considerations) of the Adjudicative Guidelines
as the basis for denying the Individual a security clearance. Ex. 1. It is well established that
“[f]ailure or inability 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 information.” Adjudicative Guidelines at ¶ 18. Among the conditions set forth in this
guideline that could raise a disqualifying security concern is the failure to file Federal or State
income tax returns or to pay Federal or State income tax as required. Id. at ¶ 19(f). In citing
Guideline F, the LSO relied upon the Individual’s admissions, in the QNSP and LOI, that he had
not filed his Federal and State personal tax returns from 2016 to 2021. Ex. 1. The cited information
justifies the LSO’s invocation of Guideline F.
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 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
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
The Individual testified that for the 2016 tax year, he wanted to prepare his Federal and State tax
returns, but he either lost, or misplaced, a form he needed to file his Federal return. Tr. at 11, 37.
He stated:
[i]t took a couple weeks before it showed up, so it was just kind of put on the pile
of things to get done and slipped off my radar. And since I didn’t have the Federal
tax return done, I couldn’t do the State return, because it requires information from
the Federal return, so it slipped. I knew that I didn’t owe any taxes for that year, so
I was going to – it just slipped off the radar.
Id. at 11. The Individual further testified that he never owes taxes because he does not claim
exemptions, and he ensures that more money is withheld from his income than he believes he will
ever owe. Id. at 20.
The Individual stated that by the time he needed to file his 2017 taxes, he had received the missing
form, and he had all the information he needed to file his 2016 tax return. Id. at 27–28. He stated
he was aware that tax returns were due to be filed in April 2017, and he knew that he “needed to
submit [his] tax forms for [his] refund,” but he did not file his 2016 tax returns even after he had
received the missing form. Id. at 28. He stated he believes he started preparing a portion of his
2016 tax returns, but did not finish the returns for 2016 or 2017. Id. at 29. The Individual further
testified he was aware he could file for an extension to file his tax return, however, he stated he
never filed an extension for the 2016 through 2021 tax filing periods. Id. He indicated that filing
an extension would have required him to do additional paperwork. Id. He also stated he did not
start the process to file his tax returns until his security clearance came up for review last summer.
Id. at 32.
Regarding his additional delinquent tax returns for the subsequent tax years 2018 through 2021,
the Individual stated that it took him additional time to review and organize his tax related
documents partly due to a learning disability, so that by the time his 2017 taxes were due, he had
double the amount of work to do to prepare his taxes and he indicated that he became
overwhelmed. Id. at 30–31. He stated that by not filing his 2016 and 2017 taxes, “it just sort of
snowballed.” Id. at 31. He again asserted that he either misplaced or lost the tax document that he
needed to complete his Federal tax return and “that caused the beginning of the cascade of not
filing” his taxes. Id. at 37. He further explained that when his security clearance came up for review
last summer, he may have mistakenly thought that he was “only two, maybe three years behind on
[his] taxes, not . . . six or seven [years behind].” Id. at 31.
The Individual further testified that his learning disability makes filing his tax returns more
difficult. Tr. at 30. The Individual explained that since he was a child, he has had a disability that
makes it more difficult for him to read and organize information from written sources. Id. at 30,
34. When asked if he has received any accommodations for his asserted disabilities, he stated that
other than in college when he received extra time to take his college tests, he has had “59 years to
adjust to these issues as best as possible.” Id. at 35. He stated he can prepare his own tax returns,
but it just takes him longer to go through all the information. Id. at 40.
The Individual explained that, more recently, it took him a few weeks to review the tax forms and
instructions to prepare his tax returns for 2016 through 2021, and when he started the process of
preparing his tax returns, it took him months to organize and review his tax related records. Id. at
30, 32. He stated that he never contacted the IRS, or his State tax authority, to ask questions about
tax instructions or to get assistance. Id. at 30–31, 33. He also stated he never sought assistance
with filing his taxes from a tax preparation service because “[his] work at DOE has made [him]
very conservative on who [he] might give personal identifiable information to,” and he assumes
identity thieves would “target tax professionals.” Id. at 40. The Individual further stated, “I can do
my own taxes.” Id. He explained, “[i]t just takes me longer to go through all the information to
make sure that I’m applying all the appropriate restrictions for things like . . . deduct[ions] from
my rental properties . . . .” Id. He stated, “[s]o all those kinds of things I can do myself. I don’t
really need a tax preparer for that.” Id. at 41. He also stated he never used tax preparation software
or obtained assistance from anyone else to help him prepare and file his tax return. Id. at 30, 41.
The Individual further testified that he has never received any financial counseling or financial
education classes because, he asserted, he does not have “any real financial problems.” Tr. at 41–
42. He asserted that he pays his credit cards in full every month; he makes “three times the average
income for [his State]. . .”; and he has not had a tax debt in the last 25 or 30 years because he
always overpays his taxes so that he receives a refund. Id. at 42, 44. The Individual further
indicated that his failure to timely file his taxes was not due to any financial problems, but rather
“missing that one piece of documentation was the trigger of the cascade of failures to file.” Id. at
42. He testified that he took “full responsibility for not having done this [filing] sooner.” Id.
The Individual submitted documentation showing that he filed his outstanding Federal and State
personal tax returns for years 2016 through 2021 ahead of the hearing date. Tr. at 12. Regarding
his Federal taxes, the Individual submitted copies of his unsigned Federal tax returns for tax years
2016 through 2021 and a copy of an IRS Account Transcript for each of those years. Ex A; Ex. B;
Ex. C; Ex. D; Ex. E; Ex. F. The Individual’s IRS Account Transcripts reflected that for each of
those years, the IRS received the Individual’s tax returns in February 2023 and subsequently
processed all of his Federal tax returns between March and April 2023. Ex. A at 3; Ex. B. at 3; Ex.
C at 3; Ex. D at 3; Ex. E at 3; Ex. F at 3. The Individual testified that he overpaid his Federal taxes
for 2016 through 2018 but he did not receive a refund from the IRS because he needed to file his
taxes earlier since “there’s a three-year limit on when you can receive a refund and the exceptions
for that three-year limit didn’t apply to [him].” See Tr. at 13–15. In support of his testimony, the
Individual’s IRS transcripts for 2016 through 2018 and his Federal tax returns for 2016 through
2018 reflected that for each of those years, the Individual had overpaid his federal taxes. Ex. A at
2–3; Ex. B. at 2, 4; Ex. C. at 2, 4.
Regarding his Federal taxes for 2019 through 2021, the Individual testified that he received a
refund for each of those years. Tr. at 16–17, 25. For his 2019 Federal taxes, his IRS tax transcript
reflected that he was issued a refund of $1,830 on March 15, 2023, and the Individual also
submitted a copy of his bank statement showing a deposit from the IRS for $1,830 on March 15,
2023. Ex. D at 3; Ex. G at 5. For his 2020 Federal taxes, he submitted an IRS tax transcript showing
that he was issued a refund of $2,320 on March 22, 2023, and a copy of his bank statement showing
a deposit from the IRS for $2,320 on March 22, 2023. Ex. E at 4; Ex. G at 5. For his 2021 Federal
taxes, the Individual submitted an IRS tax transcript showing that he was issued a refund for $3,042
on April 5, 2023, and a copy of his bank statement showed a deposit from the IRS for $3,042 on
April 5, 2023. Ex. F at 4; Ex. G at 5. In addition, the Individual submitted a copy of his IRS online
account showing that for tax years 2019, 2020, and 2021, he had a zero balance because he owed
no taxes. Ex. G at 4.
Regarding his 2016 through 2021 State taxes, the Individual submitted copies of his unsigned State
income tax returns for 2016 through 2021 and a screenshot from his State Taxation and Revenue
Department website, which shows the filing status of his 2016 through 2021 State tax returns as
“Late – Processed.” Ex. A at 45; Ex. B at 5–6; Ex. C at 5–6; Ex. D at 4–5; Ex. E at 5–6; Ex. F at
5–6; Ex. G at 1. The Individual explained that his State tax returns for 2016 through 2021 do not
show a signature because he retrieved them from the State Taxation and Revenue Department
website, which only provided copies that omitted portions of the social security number and the
signature. Tr. at 21–25. He stated that he does not have documentation showing when his State tax
returns were received or processed. Id. at 23. He stated he would have filed the returns in
approximately January or February of 2023. Id. The Individual also testified that he owed no taxes
for 2016, 2017, or 2018 to the State Taxation and Revenue Department, however, he did not
receive any refunds for those three years because the State has a three-year limit on when he could
receive a refund. Id. at 19. His State tax returns for 2016 through 2018 reflected that for each of
those years, the Individual had overpaid his State taxes. Ex. A at 5; Ex. B. at 6; Ex. C. at 6.
Regarding his State taxes for 2019 through 2021, the Individual stated that he was eligible to
receive a refund for each of those years. Tr. at 25. He submitted a screenshot of his online account
from his State Taxation and Revenue Department website which reflected that he received a tax
refund in the amount of $376 for his 2019 State taxes on February 27, 2023; he received a refund
of $535 for his 2020 State taxes issued on March 2, 2023; and he received a refund of $97 for his
2021 State taxes issued on March 23, 2023. Ex. G at 2. This was consistent with a copy of his bank
statement which showed deposits from the State for the same refund amounts that were shown in
the screenshot of his online account. Ex. G at 3.
The Individual testified that he filed his Federal and State taxes for year 2022. Tr. at 17. He asserted
that his future plans regarding filing his taxes are to “keep up with them on a regular basis.” Id. at
19. He testified that he has not put any structures in place to help him remember to file his taxes
every year because “there’s plenty of reminders in the media to tell you that tax[-]day is coming
up.” Id. at 20. The Individual explained that he starts seeing reminders to file taxes on television
at the end of December, and at the beginning of the year in January. Id. at 26. He also stated that
as it gets closer to April, he gets reminders in the media that taxes are due. Id. He admitted that
he saw those same reminders to file his taxes from 2016 through 2021. Id. at 26–27.
When asked what he would do in the future if he was missing a document necessary to prepare his
taxes, he stated that these days, more information is available online in electronic form to
download, so he will more than likely be able to get any documentation he is missing from an
online website. Tr. at 43. The Individual also asserted that undergoing the administrative review
process has impacted him and is sufficient for him to assure that he will file his taxes on time in
the future.
V. ANALYSIS
I have thoroughly considered the record of this proceeding, including the submissions tendered in
this case and the testimony of the witness presented at the hearing. In resolving the question of the
Individual’s eligibility for access authorization, I have been guided by the applicable factors
prescribed in 10 C.F.R. § 710.7(c) and the Adjudicative Guidelines. After due deliberation, I have
determined that the Individual has not sufficiently mitigated the security concerns noted by the
LSO regarding Guideline F. I cannot find that restoring the Individual’s DOE security clearance
will not endanger the common defense and security and is clearly consistent with the national
interest. 10 C.F.R. § 710.27(a). Therefore, I have determined that the Individual’s security
clearance should not be restored. The specific findings that I make in support of this Decision are
discussed below.
(a) The Adjudicative Guidelines provide that conditions that could mitigate a security concern
under Guideline F include: 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 judgment;
(b) the conditions that resulted in the financial problem were largely beyond the person’s
control . . . 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 . . . ; 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;
(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.
I find that factor ¶ 20 (a) does not apply to resolve the security concerns. First, the Individual’s
pattern of failing to file his tax returns continued until as recently as 2021, and therefore cannot be
said to have occurred so long ago. Also, very little time has passed since the Individual took
significant action to mitigate the security concerns, as he did not choose to file his 2016 through
2021 Federal and State tax returns until approximately February 2023, which was one month after
he was notified his security clearance was being suspended. Thus, as of the hearing date, the
Individual could only demonstrate an approximately four-month history of taking action to file six
years of delinquent tax returns. Second, the Individual’s behavior was frequent because he failed
to file his tax returns for six consecutive years without any significant change in his behavior or
attempt at resolution.
Third, his behavior did not occur under such circumstances that it is unlikely to recur. Losing or
misplacing a document is not an unusual circumstance and is not a sufficient basis upon which to
fail to satisfy a legal requirement to file a tax return. What I find especially concerning is that even
after obtaining the missing document he needed to file his 2016 tax return, the Individual did not
file his 2016 tax returns and continued to not file taxes through 2021. While the Individual asserted
that his learning disability made preparing his tax returns more time-consuming, he was able to
file his delinquent tax returns in 2023 for six years he had missed without assistance from the IRS,
a tax preparer, or tax preparation software. He admitted that he could prepare and file his taxes on
his own and asserted he did not need financial counseling. Moreover, after he was notified in the
January 2023, Notification Letter that his security clearance was suspended, the evidence shows
that he was able to successfully file all of his delinquent tax returns one month later, in
approximately February 2023. Additionally, aside from his testimony at the hearing, he provided
no corroborating evidence of his learning disability. Therefore, I do not find it credible that the
Individual’s learning disability was of such severity that it rendered him unable to timely file his
tax returns for six consecutive years. In addition, I do not find credible the Individual’s assertions
that the messages he receives from the media are sufficient reminders for him to file his taxes on
time in the future. He admitted that he received such media messages for each tax year from 2016
through 2021, and they did not spur him to timely file his tax returns for those years. Thus, I cannot
conclude that the Individual’s failure to file his tax returns is unlikely to recur.
By failing to file his tax returns for an extended period, from 2016 through 2021, and choosing not
to take significant actions to resolve his tax issues until very recently, the Individual has also shown
that his behavior continues to cast doubt upon his current reliability, trustworthiness, or good
judgment. Despite his assurances to the OPM investigator in June 2022, that he was going to file
his delinquent tax returns “within the next few weeks,” he still had not filed his tax returns as of
November 2022. Ex. 7 at 57. He then provided additional subsequent assurances by stating that he
was “close to being able to file” in his November 2022 LOI response. Ex. 5 at 1. However, the
Individual did not file his delinquent tax returns until approximately February 2023, which shows
that he delayed filing his taxes for eight months after the assurances that he provided to the OPM
investigator. This significant delay demonstrates that the Individual’s assurances are not supported
by his actions, thereby casting doubt on his reliability and trustworthiness. Moreover, the
Individual provided no reasonable excuse for his failure to seek an extension to file his tax returns
despite knowing he was able to do so, which casts doubt on his judgment and ability to take
appropriate action in the future. The Individual has not demonstrated he can be trusted to
consistently file his tax returns every year. His continued failure to file these returns until prompted
to do so because of the present proceeding creates serious doubt as to the Individual’s ability to be
trusted to follow rules or regulations. Therefore, I find the Individual has not mitigated the security
concerns under factor ¶ 20(a). See Personnel Security Decision, OHA Case No. PSH-19-0040
(2019) (Administrative Judge’s finding that despite filing all his outstanding tax returns, the
Individual did not mitigate under ¶ 20 (a) in part because of the pattern of failure to file taxes
continued until relatively recently and over an extended period of time).
Regarding factor ¶ 20(b), there is no evidence the Individual’s failure to file tax returns for six
consecutive years was due to circumstances beyond his control and that he acted responsibly under
the circumstances. As noted above, the Individual allegedly failed to file his 2016 tax return
because he did not have a document necessary to prepare the return. However, despite having
obtained the missing document in 2017, the Individual still failed to act responsibly under the
circumstances by neglecting to file his 2016 tax returns when he had all tax related information
which he needed to do so, and he continued to not file any tax returns for five additional years.
Moreover, although he was aware that he could file a request for an extension, by deciding to
instead avoid addressing his tax filing obligations, he again did not act responsibly under the
circumstances. While he asserted that he took full responsibility for not filing his tax returns
sooner, his behavior demonstrated a lack of responsibility over a continuous six-year period.
Therefore, I find the Individual has not mitigated the security concerns under factor ¶ 20(b).
Regarding factor ¶ 20(c), the Individual’s failure to fail his tax returns from 2016 to 2021 was not
due to financial strain, for which the Individual would have benefitted from financial counseling.
The Individual also testified he did not seek financial counseling. Therefore, I find that mitigating
factor ¶ 20(c) is not applicable to this case.
Regarding factor ¶ 20(d), there is no evidence the Individual owed taxes because of his failure to
file tax returns from 2016 to 2021 or that he has any overdue debts that need to be resolved.
Therefore, I find that mitigating factor ¶ 20(d) is not applicable to this case.
Regarding factor ¶ 20(e), the Individual did not owe any taxes nor does he have any past-due debt
resulting from his failure to file tax returns from 2016 to 2021. Therefore, I find that mitigating
factor ¶ 20(e) is not applicable to this case.
Regarding factor ¶ 20(f), the security concerns raised by the LSO do not involve unexplained
affluence. Therefore, I find that mitigating factor ¶ 20(f) is not applicable to this case.
Regarding factor ¶ 20(g), the Individual submitted documentation sufficient to establish that he
filed his Federal and State income tax returns for years 2016 through 2021. Nevertheless, I find
that this mitigating factor is outweighed by my concerns described above. Any mitigation provided
by the Individual’s very recent filing of his delinquent tax returns is overshadowed by the
longstanding nature of the behaviors that have raised these security concerns. As explained above,
I am not convinced that the Individual’s behavior is unlikely to recur. Accordingly, I conclude that
the Individual has not resolved the Guideline F security concerns.
VI. CONCLUSION
In the above analysis, I found that there was sufficient derogatory information in the possession of
the DOE that raised security concerns under Guideline F of the Adjudicative Guidelines. After
considering all of the relevant information, 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, I have determined that the
Individual’s access authorization should not be restored.
This Decision may be appealed in accordance with the procedures set forth at 10 C.F.R. § 710.28.
Brenda B. Balzon
Administrative Judge
Office of Hearings and Appeals