DATE:  November 30, 2007
In re:
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SSN:  ------------ 
Applicant for Security Clearance
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ISCR Case No. 07-05231
DECISION OF ADMINISTRATIVE JUDGE
ERIN C. HOGAN
APPEARANCES
FOR GOVERNMENT
Gina L. Marine, Esq., Department Counsel
FOR APPLICANT
Bertha McMillian, Personal Representative
SYNOPSIS
Applicant owes approximately $35,790 in taxes, penalties and interest to the Internal
Revenue Service for tax years 1991, 1996, 1998, 1999 and 2000. He has retained a certified public
accountant to assist him in obtaining a settlement of the tax liabilities with the federal government.
Once a settlement is reached, his older sister is willing to pay the tax debt for him. An offer in
compromise was submitted to the Internal Revenue Service only two weeks prior to the hearing. The
status of negotiations with the Internal Revenue Service is uncertain. A promise to pay in the future
is not sufficient to mitigate the concerns raised under financial considerations. Clearance is denied.
STATEMENT OF CASE
This action was taken under Executive Order 10865, dated February 20, 1960, as amended, and DoD Directive1
5220.6, dated January 2,1992, as amended and modified (Directive).
 Gov 1.2
 Tr. at 38; AE M. 3
 Tr. at 12.4
 Tr. at 33.5
2
On July 24, 2007, the Defense Office of Hearings and Appeals (DOHA) issued to Applicant
a Statement of Reasons (SOR) stating they were unable to find that it is clearly consistent with the
national interest to grant or continue a security clearance.  The SOR, which is in essence the1
administrative complaint, alleges security concerns under Guideline F, Financial Considerations,
of the revised Adjudicative Guidelines (AG) issued on December 29, 2005, and implemented by the
Department of Defense effective September 1, 2006.
In a sworn statement, dated September 3, 2007, Applicant responded to the SOR allegations
and elected to have a hearing before an administrative judge. The case was assigned to me on
October 2, 2007. On October 4, 2007, a notice of hearing was sent scheduling the hearing for
October 24, 2007. The hearing was held as scheduled. The government offered four exhibits which
were admitted as Government Exhibits (Gov) 1-4 without objection. Applicant offered 12 exhibits
which were admitted as Applicant Exhibits (AE) A - L without objection. The transcript was
received on November 5, 2007.
FINDINGS OF FACT
In his SOR response, Applicant denies the overall concern under Guideline F but admits to
the factual allegation in SOR ¶ 1.a. Applicant’s admissions are incorporated herein. In addition, after
a thorough and careful review of the pleadings and exhibits, I make the following findings of fact.
Applicant is a 51-year-old man employed with a Department of Defense contractor who is
applying for a security clearance.  He is married and has three adult children from a previous2
marriage. He has three children with his current wife, whom he married in August 2002 a step-
daughter, age 7, and two daughters ages 4 and five months.  He has been employed as a switch3
technician with his current company since October 2006.  He has worked as a contractor on a
military base over the last 17 years.  4
In the early 1990s, Applicant divorced his first wife.  He underwent several years of
instability. During this time he did not file his taxes, although he was aware of the requirement to
file tax returns.  He cashed in a profit-sharing plan in 1996 in order to purchase a home but did not5
pay taxes on it. As a result, a tax lien was filed against Applicant on February 7, 2005.  Applicant
owes approximately $35,790 to the Internal Revenue Service (IRS) for tax years 1991, 1996, 1998,
 Tr. at 26,28, 33, 38; Gov 4. 6
 Tr. at 29-30.7
 Gov 1. 8
 Tr. at 26; Gov 2 at 2.9
 Tr. at 29. 10
 AE A; AE B; Tr. at 31. 11
 Tr. at 39-40. 12
 Tr. at 45-48. 13
 Tr. at 26, 44. 14
 Tr. at 40. 15
 Tr. at 36; Gov 2 at 4.16
3
1999 and 2000.   No payments have been made towards the tax debt aside from the IRS keeping6
Applicant's tax refunds and applying the refunds towards his tax debt.7
On October 17, 2006, Applicant completed an Electronic Questionnaire for Investigations
Processing (e-QIP). In response to question 27(b), he listed his tax lien. He indicated that he hired
a tax firm to work on the tax lien.  8
Applicant first became aware of his tax issues about three or four years ago after being
contacted by the IRS.   He attempted to resolve the debt after he was contacted by the IRS regrading9
the delinquent tax debt. He claims that he submitted offers in compromise individually but the offers
were rejected by the IRS.  In 2005, he retained a CPA firm to assist him with settling the tax debt.10 11
It is unclear, what contact, if any, the CPA firm had with the IRS. Applicant informed his CPA
approximately two weeks prior to the hearing that he wanted to submit an offer in compromise. He
does not know the amount of the initial offer. His CPA will notify him once he prepares the offer
in compromise.12
Applicant's sister testified that once Applicant and the IRS reach a settlement, she is going
to pay the tax debt for him.  She is not treating the payment as a loan.  She wants to help her brother
because he has struggled through the years. She has the assets to pay the tax debt.13
Applicant testified that his wife helped him straighten out his tax problems and has helped
him resolve his financial difficulties.  Since 2001, he has filed and paid his taxes.  14
Applicant had no breaks in employment over the past 17 years.  He and his wife have a net15
monthly income of $5,800. The total monthly expenses are $2,791. The total monthly debt payments
are $1,055.  This leaves a current monthly remainder of $1,954.   Applicant testified that the net16
 Tr. at 36-37.17
 AE C-J.18
 AE K. 19
 AE L.20
 Department of the Navy v. Egan, 484 U.S. 518, 527 (1988). 21
 Revised AG, dated August 2006, ¶ 18. 22
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monthly remainder is accurate but they do not have that much in the bank at the end of the month.17
Applicant is well regarded by his friends and co-workers.  His annual performance appraisal18
issued in October 2007 gives an overall rating of "exceptional" which is the highest rating an
employee can receive.  He successfully completed several training sessions in furtherance of his19
career and received numerous certificates of achievement for his work performance.20
POLICIES
The President has “the authority to . . . control access to information bearing on national
security and to determine whether an individual is sufficiently trustworthy to occupy a position …
that will give that person access to such information.”  In Executive Order 10865, Safeguarding21
Classified Information Within Industry (Feb. 20, 1960), the President set out guidelines and
procedures for safeguarding classified information within the executive branch. 
To be eligible for a security clearance, an applicant must meet the security guidelines
contained in the Directive.  The revised Adjudicative Guidelines, approved by the President on
December 29, 2005 and implemented by the Department of Defense, effective September 1, 2006,
sets forth personnel security guidelines, as well as the disqualifying conditions and mitigating
conditions under each guideline.  The adjudicative guideline at issue in this case is: 
Guideline F - Financial Considerations: Failure 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.  An individual who is financially overextended is at risk of
having to engage in illegal acts to generate funds.22
Conditions that could raise a security concern and may be disqualifying, as well as those
which could mitigate security concerns pertaining to this adjudicative guideline, is set forth and
discussed in the conclusions below.
 Revised AG, dated August 2006, ¶ 2(a). 23
 Id.24
 Directive ¶ E3.1.14.25
 Directive ¶ E3.1.15.26
Revised AG, dated August 2006, ¶ 2(b).27
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“The adjudicative process is an examination of a sufficient period of a person’s life to make
an affirmative determination that the person is an acceptable security risk.”   An administrative23
judge must apply the “whole person concept,” and consider and carefully weigh the available,
reliable information about the person.  An administrative judge should consider the following
factors: (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.  24
Initially, the Government must present evidence to establish controverted facts in the SOR
that disqualify or may disqualify the applicant from being eligible for access to classified
information.  Thereafter, the applicant is responsible for presenting evidence to rebut, explain,25
extenuate, or mitigate the facts admitted by the applicant or proven by Department Counsel.  The
applicant has the ultimate burden of persuasion as to obtaining a favorable clearance decision.26
“Any doubt concerning personnel being considered for access to classified information will be
resolved in favor of the national security.”  27
A person granted access to classified information enters into a special relationship with the
government.  The government must be able to repose a high degree of trust and confidence in those
individuals to whom it grants access to classified information.  The decision to deny an individual
a security clearance is not a determination as to the loyalty of the applicant. It is merely an indication
that the applicant has not met the strict guidelines the President has established for issuing a
clearance.
CONCLUSIONS
I have carefully considered all the facts in evidence and the legal standards. I make the
following conclusions.
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Guideline F - Financial Considerations
Applicant's tax debt owed to the Internal Revenue Service raises a security concern. He owes
approximately $35,790 for delinquent income taxes for tax years 1991, 1996, 1998, 1999, and 2000.
Financial Considerations Disqualifying Condition (FC DC) ¶19(a) (inability or unwillingness to
satisfy debts) and FC DC ¶19(c) (a history of not meeting financial obligations) apply to Applicant's
case.  He has owed these tax debts for a long time. Applicant has the means to pay his taxes but chose
not to. He was employed full-time during the time that he failed to file tax returns and pay his income
taxes.  His conduct demonstrates an unwillingness to pay his taxes as opposed to an inability to do
so. 
FC DC ¶ 19(g) (failure to file Federal, state, or local income tax returns as required or the
fraudulent filing of the same) applies. Applicant admits that he intentionally did not file his income
tax returns for tax years, 1991, 1996, 1998, 1999 and 2000. 
The concern under Financial Considerations can be mitigated. Applicant  has a history of
financial irresponsibility pertaining to his federal income tax returns spanning several years. His
federal tax debt remains unresolved.  Therefore, I cannot apply Financial Considerations Mitigating
Condition (FC MC) ¶ 20 (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). Applicant owes the IRS for delinquent income
taxes over five tax years. The debts were incurred as a result of Applicant failing to file his tax
returns. Aside from the IRS applying Applicant's income tax refunds to the tax debt, no other
payments have been made towards the tax debt. None of the tax debts are resolved so the problem
remains. 
FC MC ¶ 20(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, or
a death, divorce, or separation) and the individual acted responsibly under the circumstances) does
not apply.  Applicant has been continuously employed for the past 17 years. He admits that he was
irresponsible when it came to filing and paying his federal income taxes. Although he retained an
accounting firm to represent him in resolving his tax debt, he did not authorize his accountant to
submit an offer in compromise to the IRS until two weeks prior to the hearing. Applicant has not
demonstrated that he has taken proactive steps to resolve these tax debts considering the age of the
tax debts. I cannot conclude that there were recent conditions beyond Applicant's control which
contributed to his financial situation.  FC MC ¶ 20(b) does not apply. 
FC MC ¶ 20(c) (the person has received or is receiving counseling for the problem and/or
there are clear indications that the problem is being resolved or is under control) does not apply.
Applicant has not received financial counseling. It is too soon to conclude that the tax problem is
resolved or under control. At the close of the record, an offer in compromise had not been submitted
to the IRS. Although his sister states that she will pay the tax debt for him once an offer in
compromise is reached, a promise to pay in the future is not sufficient to mitigate the concerns raised
under the financial considerations concern.  It is unlikely that Applicant's tax debt will be resolved
in the near future.
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FC MC ¶ 20(d) (the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts) does not apply.  Although aware that he was required to file and pay taxes
during the tax years in question, Applicant took no steps to resolve his federal tax debt until the IRS
filed a tax lien against him.  While he has retained an accounting firm for the past two years to assist
with the tax debt,  no steps have been taken to resolve the taxes owed. Given the age of the tax debts,
I cannot conclude that Applicant made a good faith effort to resolve the tax debts. He could have
negotiated a payment plan with the IRS sooner. Authorizing his accountant to submit an offer in
compromise two weeks prior to his security clearance hearing does not demonstrate a good faith effort
to resolve the debt.
In all adjudications, the protection of our national security is the paramount concern. The
objective of the security clearance process is the fair-minded, commonsense assessment of a person’s
life to make an affirmative determination that the person is eligible for assignment to sensitive duties.
Indeed, the adjudicative process is a careful weighing of a number of variables in considering the
“whole person” concept. It recognizes that we should view a person by the totality of their acts,
omissions, motivations and other variables. Each case must be adjudged on its own merits, taking into
consideration all relevant circumstances, and applying sound judgment, mature thinking, and careful
analysis.
I have considered all the evidence and the “whole person” in evaluating Applicant’s security
worthiness. I considered the Applicant's favorable performance report and the recommendations of
his friends and co-workers.  However, the tax debt remains outstanding. Considering that Applicant
deliberately failed to file his income tax returns for five years; he did not attempt to resolve the tax
debts until several years later after the IRS contacted him; and the resolution of the tax debt at the
close of the record is uncertain; he has not met his burden to mitigate the concerns raised under
financial considerations. Based on the evidence in the record, it is not clearly consistent with the
national interest to grant Applicant a security clearance. Clearance is denied.
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
Subparagraph 1.a: Against Applicant
DECISION
In light of all of the evidence presented by the record in this case, it is not clearly consistent
with the national interest to grant Applicant a security clearance. Clearance is denied.
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Erin C. Hogan
Administrative Judge