PSH-24-0155

United States Department of Energy
Office of Hearings and Appeals
In the Matter of: Personnel Security Hearing )
)
Filing Date: July 22, 2024 ) Case No.: PSH-24-0155
)
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Issued: January 29, 2025
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Administrative Judge Decision
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Brenda B. Balzon, Administrative Judge:
This Decision concerns the eligibility of XXXXXXXX (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 or Eligibility to Hold a Sensitive Position.”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 be granted.
I. Background
The Individual is employed by a DOE contractor in a position that requires him to hold a security
clearance. In May 2023, the Individual completed a Questionnaire for National Security Positions
(QNSP). Exhibit (Ex.) 6 at 84.2 In the QNSP, the Individual disclosed that he failed to file his
federal and state personal income tax returns for the 2020 and2021 tax years. Id. at 79–80.
The local security office (LSO) issued the Individual a letter of interrogatory (LOI) concerning his
financial situation. Ex. 5. In his April 2024, LOI response, he stated that he had not yet filed his
federal and state taxes for 2020 and 2021. Id. at 42. He stated that he was attempting to contact his
past employer and obtain the necessary tax documentation he needed to file his outstanding tax
returns. Id. at 43.
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 The exhibits submitted by the DOE were Bates numbered in the upper right corner of each page. This Decision will
refer to the Bates numbering when citing to exhibits submitted by DOE.
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The LSO subsequently issued the Individual a Notification Letter advising him that it possessed
reliable information that created substantial doubt regarding his eligibility to hold a security
clearance. Ex. 1 at 6–7. In the Summary of Security Concerns (SSC) attached to the Notification
Letter, the LSO explained that the derogatory information raised security concerns under Guideline
F (Financial Considerations) of the Adjudicative Guidelines. Id. at 5.
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. At the hearing, the DOE Counsel submitted seven numbered exhibits (Ex. 1–7) into the
record. The Individual submitted eight lettered exhibits (Ex. A–H) into the record and testified on
his own behalf. See Transcript of Hearing, OHA Case No. PSH-24-0155 (hereinafter cited as
“Tr.”).
II. Notification Letter and Associated Security Concerns
The LSO cited Guideline F (Financial Considerations) of the Adjudicative Guidelines as the basis
for its concerns regarding the Individual’s eligibility for access authorization. Ex. 1. “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 . . .
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). The SSC cited the
Individual’s failure to file federal or state personal income tax returns for the 2020 and 2021 tax
years. Ex. 1.
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 their eligibility for an access authorization. The
Part 710 regulations are drafted to permit the introduction of a very broad range of evidence at
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personnel security hearings. Even appropriate hearsay evidence may be admitted. Id. § 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 the Individual’s April 2024 response to his LOI, he stated that he had not filed his 2020 federal
and state taxes and explained that during that year’s tax season, he lost his job and had his car
repossessed. Ex. 5 at 42. He stated in his LOI response that he was obtaining the tax documents
that he needed in order to file his 2020 taxes. Id. The Individual stated that he also did not file his
2021 federal and state taxes. Id. He stated in his LOI response that he did not timely file his 2021
taxes because at the time, he was preparing to move across the country and so he was not focused
on filing his taxes. Id. In his LOI response, he stated that he has since subsequently attempted to
file his 2021 taxes, but he is “stuck [because] the information isn’t matching what the IRS has on
file.” Id. The Individual further stated in his LOI response that he has been making efforts to
contact his past employers to obtain the necessary tax documents to file his taxes and that once he
has the correct documents and confirms that they match with the information that the Internal
Revenue Service (IRS) has on file, he will be able to file his income tax returns. Id. at 43. He also
stated in his LOI response that he has timely filed his federal and state income tax returns for tax
year 2022. Id. at 42.
Regarding his employment during the 2020 and 2021 tax years at issue, the Individual testified
that he went to college in State A, and while he was in school, he worked at an internship position
(Employer 1) from 2018 until approximately summer 2020. Tr. at 13, 24, 45; Ex. 6 at 60 (May
2023 QNSP stating the Individual was employed from approximately February 2018 to May
2020). He testified that he stopped attending college in spring 2020, and subsequently obtained a
job in fall 2020 where he worked in insurance sales (Employer 2) in State A. Tr. at 12, 15–16. In
his May 2023 QNSP, the Individual stated that he worked as an insurance agent for Employer 2
from September 2020 until September 2021. Ex. 6 at 59. In the Individual’s LOI response, he
asserted that his insurance sales job led to his financial struggles because he was working “80
h[ours] a week yet only got paid when [he] would make a sale” as the job was “100% commission
based.” Ex. 5 at 44. At the hearing, the Individual testified that due to his inability to make
insurance sales, he lacked sufficient financial resources and as a result his vehicle was repossessed
and he was eventually evicted from his residence. Tr. at 13. He stated that during this time period,
he was not thinking about filing taxes, because he was more concerned about coping with his
financial difficulties. Id. The Individual further testified that although he continued working in his
insurance sales job in 2021, he only earned income “for the first couple months of 2021” and the
job ended in September 2021. Tr. at 13, 15. He testified that after he was subsequently evicted
from his residence, he moved from State A to return to his home state, and he was unemployed
from September 2021 until April 2022. Id. at 13.
The Individual testified regarding the delays and difficulties he had in obtaining his tax documents
and the problems he had when attempting to file his taxes, which he had discussed in his April
2024, LOI response. Tr. at 44–47; Ex. 5 at 42–43. He testified that prior to 2020, he had never
filed taxes because his parents had claimed him as a dependent when they filed their tax returns.
Id. at 24–25. He testified that when he tried to obtain his necessary tax documents, he was able to
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obtain his wage and tax form from Employer 1; however, he had difficulty obtaining his 1099 tax
form from Employer 2. Id. at 44–46. The Individual stated that because he worked for Employer
2 at his insurance job in 2020 and in 2021, he needed to obtain his 1099 tax forms from Employer
2 for both of those years in order to file his 2020 and 2021 taxes. Id. at 47. However, he stated that
when he called Employer 2, he was unable to obtain his 1099 forms because Employer 2 did not
refer him to the correct department but instead referred him to various departments such as
accounting and customer service. Id. at 45. The Individual testified that after he made multiple
unsuccessful attempts involving “phone tag” with various departments, he stopped following up
on his attempts to contact Employer 2. Id. at 45–46. He also testified that although he did not
attempt to file this 2021 tax return, he had attempted to file his 2020 taxes using Turbo Tax
software. Id. at 38–39. However, he stated that every time he would enter his income in the tax
software based on his pay stubs instead of his 1099 form, Turbo Tax kept rejecting it stating that
his income amount was incorrect, so his tax return was not accepted. Id. at 26–27, 38–39.
Regarding his 2021 taxes, the Individual testified that “it just never clicked in my brain that [filing
his income tax returns is] something that [he] need[ed] to do, even for how little of a period it was”
that he worked in 2021. Id. at 40. He explained that even though he was employed at his insurance
sales job until September 2021, he had only made a sale in the beginning of 2021, so he did not
think he needed to file income taxes in 2021. Tr. at 40.
At the hearing, the Individual testified that he had recently spoken to an IRS representative and
obtained documentation from the IRS and the state tax authority for State A which shows that he
was not required to file federal or state income taxes in 2020 and 2021 based on the amount of his
income in 2020 and 2021. Tr. at 10–12, 36, 48, 50–51. He testified that prior to the hearing, he
prepared his 2020 and 2021 tax returns and was going to file them, however, he then called the
IRS before filing his taxes and they referred him to their website. Id. at 10. The Individual asserted
that the IRS told him that the information on their website shows how he could “figure out, by
using [his] tax information to see if [he] qualif[ies]” to not have to file taxes “because [his] income
was so low.” Id. The Individual testified that based on the information he obtained from the IRS
website, the income threshold for not being required to file taxes is under $12,500. Id. at 10–11.
The Individual submitted a chart from the IRS website that stated, “Income amount that requires
you to file.”3 Ex. A. The IRS chart stated, “If you were under 65 at the end of 2023 . . . [i]f your
filing status is Single[,] [f]ile a tax return if your gross income is $13,850 or more.”4 Id.
Regarding tax year 2020, the Individual submitted his IRS Wage and Income Transcript for 2020
which included his compensation from Form 1099 for Employer 1 and Employer 2 and reflected
3 Exhibit A reflects that the IRS chart is from the IRS website at https://www.irs.gov/individuals/check-if-you-need-
to-file -a-tax-return.
4 Exhibit A reflects the income threshold requirements for filing a federal tax return for 2023. Ex. A. For tax year
2020, the IRS Instructions for Form 1040 includes “Chart A” which states in relevant part, “IF your filing status is
Single[,] AND at the end of 2020 you were under 65 . . . THEN file a return if your gross income was at least $12,400.”
IRS, 2020 Inst. 1040 (PDF): Instructions for Form 1040 or Form 1040-SR, U.S. Individual Income Tax Return,
https://irs.gov/pub/irs-prior/i1040g--2020.pdf at 10 (last visited January 24, 2025). For tax year 2021, “Chart A” states
in relevant part, “IF your filing status is Single[,] AND at the end of 2021 you were under 65 . . . THEN file a return
if your gross income was at least $12,550.” IRS, 2021 Inst. 1040 (PDF): Instructions for Form 1040 or Form 1040-
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that his compensation from Employer 1 was $1668 and his compensation from Employer 2 was
$5792. Ex. B (IRS Wage and Income Statement for 2020). This shows that the Individual’s total
gross income for 2020 was $7460. Additionally, the Individual submitted his IRS Account
Transcript for 2020 which reflected that he had an account balance of zero. Ex. C (IRS 2020 Tax
Transcript dated November 21, 2024).
Regarding tax year 2021, the Individual submitted his IRS Wage and Income Transcript for 2021
which stated his compensation from Form 1099 for Employer 2 and reflected that his
compensation for 2021 was $6680. Ex. D (IRS Wage and Income Statement for 2021).
Regarding his state taxes for 2020 and 2021, the Individual testified that he checked the website
for the state tax authority for State A, and based on information that he obtained, he learned that
he was not required to file state taxes in State A because of his low income. Tr. at 26, 36. The
Individual submitted a chart from the State A’s tax authority website which stated, “Filing
Requirements Chart for Tax Year 2023.” Ex. E. The chart stated in relevant part that for individuals
whose “Filing Status is Single. . . A Return is Required if Federal Gross Income Exceeds
$12,750.”5 Id.
The Individual testified that he admits he did not have a good reason for his delay in conducting
the tax research he needed to complete in order to determine whether he was required to file federal
and state taxes for the years at issue. Tr. at 18. He stated that he has learned lessons from his
previous financial struggles while he was working at the insurance sales company including
experiencing hardship of having his car repossessed and getting evicted. Id. at 34.
V. Analysis
Conditions that could mitigate security concerns under Guideline F include:
(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
SR, U.S. Individual Income Tax Return, https://www.irs.gov/pub/irs-prior/i1040gi--2021.pdf at 10 (last visited January
24, 2025).
5 Ex. D reflects the income threshold requirements for filing a State A tax return for tax year 2023. For tax year 2020,
the State A Individual Income Tax Instructions contains a “Filing Requirements Chart” which states in relevant part
that for an individual whose “Filing Status [is] Single . . . A Return is Required if Federal Gross Income Exceeds
$10,750.” https://www.[] at 8 (last visited January 24, 2025). For tax year 2021, State A’s “Filing Requirements Chart”
states in relevant part that for an individual whose “Filing Status [is] Single . . .A Return is Required if Federal Gross
Income Exceeds $10,750.” https://www.[] at 6 (last visited January 24, 2025). Thus, the income threshold for filing
state taxes in State A in 2021 is the same (filing a tax return is required if Federal Gross Income Exceeds $10,750) as
in 2020. Id.
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emergency, a death, divorce or separation, clear victimization by predatory lending
practices, or identity theft), and the individual acted responsibly under the
circumstances;
(c) the individual has received or is receiving financial counseling for the problem from a
legitimate and credible source, such as a non-profit credit counseling service, and there
are clear indications that the problem is being resolved or is under control;
(d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors
or otherwise resolve debts;
(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt
which is the cause of the problem and provides documented proof to substantiate the
basis of the dispute or provides evidence of actions to resolve the issue;
(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.
With respect to the security concerns regarding the Individual’s failure to file personal income tax
returns, the Individual demonstrated that based on his income during tax years 2020 and 2021, he
was not required to file a federal or state income tax return for either of those years. Relevant
information and documentation from the IRS and the state tax authority for State A, combined
with the Individual’s IRS Wage and Income Statements, reflects that for both 2020 and 2021, the
Individual’s gross income was below the income threshold required to file federal and state income
tax returns for those tax years. Although the record now shows that the Individual was not required
to file tax returns for those years, the fact that he neglected to do the necessary research and obtain
the correct documentation at the time that he disclosed in his QNSP and subsequent LOI response
that he had failed to file his tax sufficiently supports the LSO’s allegations in the SSC.
Notwithstanding the fact that the Individual has established that he was not required to file state
or federal income tax returns in 2020 and 2021, I find that the Individual’s circumstances
surrounding the tax years at issue were related to isolated incidents that are unlikely to recur. Prior
to 2020, the Individual had never needed to file an income tax return because his parents had
claimed him as a dependent when they filed their tax returns. He is now aware of his tax
obligations. Moreover, while the Individual did not have a good reason for his delay in conducting
the research and obtaining the documents necessary to resolve the issue, he has since demonstrated
the ability to properly research tax issues as necessary in order to maintain compliance with tax
filing requirements as evidenced by the IRS and State A tax documentation he provided. Therefore,
I find that the Individual has mitigated the Guideline F security concerns under the first mitigating
factor at ¶ 20(a).
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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 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 be granted.
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