Item 5.1
Item 1.2
1
                                                                     
                               DEPARTMENT OF DEFENSE
                DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
-----------, ------- -------- )       ISCR Case No. 09-05056
SSN: ------ ---- -------- )
)
Applicant for Security Clearance )
Appearances
For Government: Tovah A. Minster, Esquire, Department Counsel
For Applicant: Pro se
______________
Decision
______________
WHITE, David M., Administrative Judge:
Applicant admittedly failed to file his federal and state income tax returns for tax
years 2004 through 2008, without good cause. He claimed that a tax service filed these
returns for him between February and April 2010, but provided no evidence to
substantiate that claim, or otherwise mitigate resulting security concerns. Based upon a
review of the case file, pleadings, and exhibits, eligibility for access to classified
information is denied. 
Applicant submitted a security clearance application (SF 86) on March 30, 2009.1
On January 28, 2010, the Defense Office of Hearings and Appeals (DOHA) issued a
Statement of Reasons (SOR) to Applicant, detailing security concerns under Guideline
F (Financial Considerations).  The action was taken under Executive Order 10865,2
Safeguarding Classified Information within Industry (February 20, 1960), as amended;
Department of Defense Directive 5220.6, Defense Industrial Personnel Security
Item 4.3
The Government submitted six Items in support of the SOR allegations.4
Item 5; Item 6.5
Item 5 at 30-31.6
2
Clearance Review Program (January 2, 1992), as amended (Directive); and the
adjudicative guidelines effective within the Department of Defense for SORs issued
after September 1, 2006. 
Applicant answered the SOR in writing on February 21, 2010, and requested that
his case be decided by an administrative judge on the written record without a hearing.3
Department Counsel submitted the Government’s written case on March 25, 2010. A
complete copy of the File of Relevant Material (FORM)  was provided to Applicant, and4
he was afforded an opportunity to file objections and submit material in refutation,
extenuation, or mitigation within 30 days of his receipt of the FORM. 
Applicant signed the document acknowledging receipt of his copy of the FORM
on April 7, 2010, and returned it to DOHA. He provided a written response to the FORM
on May 7, 2010, in which he made no objection to consideration of any evidence
submitted by Department Counsel. On May 13, 2010, Department Counsel initialed a
memorandum indicating no objection to the admissibility into evidence of the materials
submitted by Applicant. I received the case assignment on May 25, 2010.
Findings of Fact
Applicant is a 51-year-old employee of a federal contractor, where he has worked
since September 1995. He has no military service. This is his first application for a
security clearance. He is single, with no children. Applicant earned an associate’s
degree in May 2006. He graduated from high school in 1977, and took a few college
courses over the next several years.  In his response to the SOR, he formally admitted5
the allegations in SOR ¶¶ 1.a through 1.h. Applicant’s admissions, including his
response to the SOR, and to DOHA interrogatories, are incorporated in the following
findings.
Applicant disclosed, in Section 26 on his SF 86, that he failed to file a tax return
when required by law or ordinance. He explained, “Taxes have always been deducted
from my pay check, but I have failed to file a tax return the last several years.”  On May6
28, 2009, he was interviewed about this and other matters by an investigator from the
Office of Personnel Management (OPM). On November 5, 2009, Applicant confirmed
that the investigator’s summary of the interview was accurate, and offered no pertinent
supplementary information. The interview summary reflected the following information
provided by Applicant: 
Item 6 at 9.7
Item 6 at 14-17.8
Item 4.9
FORM response letter of May 7, 2010.10
Id.11
3
He is currently going into the 4  year of not filing his [sic] both his stateth
and federal tax returns. He has a mental block with regard to filing taxes,
which has caused him to procrastinate when it comes to filing his taxes.
His taxes have always been property [sic] deducted from his earnings/pay
checks. He has never owed any back taxes. He plans to, within the next
12 months, utilize the services of a tax professional/tax firm, to become
current with respect the [sic] filing of his taxes.7
On November 5, 2009, Applicant also responded to a series of interrogatories
from DOHA concerning his tax returns. He was asked individual questions concerning
whether he had filed his state income tax return and his federal income tax return for
each year beginning with 2005 and ending with 2008. Each question informed him that
if he had filed the return, he should “provide proof of the filing, such as a receipt with a
‘stamp in’ date from” the respective tax authority. He answered “No” in response to each
question, and his explanation for each failure to file was, “Procrastination.”8
As noted above, DOHA issued Applicant an SOR on January 28, 2010, citing his
failures to file state and federal tax returns, as required, for each tax year from 2005 to
2008. In his February 21, 2010 response to the SOR, Applicant stated that he had
gathered needed documentation and enlisted a tax preparation service to file his
outstanding returns. He stated that he expected the filings to be completed within two
weeks, and that he planned on filing his 2009 and future year tax returns in a timely
fashion. Applicant provided no documentary evidence to substantiate his statements.  9
In his response to the FORM, Applicant provided a name, address, and
telephone number for a tax service that he claimed provided him tax advice and
prepared his federal and state tax returns, for the years 2004 through 2009, in February
2010. He further said that all the returns were “mailed to the IRS and the state . . .
before the April 15 , 2010 deadline.”  He further reported that all returns resulted inth 10
refunds of unspecified amounts, except his 2004 state return on which he owed
$309.39. His letter stated, “(Detailed receipt from tax preparer can be provided upon
request.)”  Again, Applicant failed to provide any documentary evidence to substantiate11
his claims.
Applicant submitted no other evidence describing his character, trustworthiness,
or work performance. Department Counsel specifically commented on Applicant’s lack
of “documentary evidence showing his arrangements with this tax service or proof that
FORM at 4-5.12
4
the returns were filed,” in the Argument section of the FORM, and identified the need for
him to submit such documentation to establish mitigation.  Applicant failed to provide12
any proof supporting his claim to have filed the delinquent tax returns in his response to
the FORM, and it is his burden to obtain and provide such evidence if he wants it to be
considered in mitigation. I was unable to evaluate Applicant’s credibility, demeanor, or
character in person since he elected to have his case decided without a hearing.
Policies
When evaluating an applicant’s suitability for a security clearance, the
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions (DCs) and mitigating conditions (MCs), which are to be used in
evaluating an applicant’s eligibility for access to classified information.
These guidelines are not inflexible rules of law. Instead, recognizing the
complexities of human behavior, these guidelines are applied in conjunction with the
factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s
overarching adjudicative goal is a fair, impartial, and commonsense decision. According
to AG ¶¶ 2(a) and 2(c), the entire process is a conscientious scrutiny of applicable
guidelines in the context of a number of variables known as the whole-person concept.
The administrative judge must consider all available, reliable information about the
person, past and present, favorable and unfavorable, in making a decision.
The protection of the national security is the paramount consideration. AG ¶ 2(b)
requires that “[a]ny doubt concerning personnel being considered for access to
classified information will be resolved in favor of the national security.” In reaching this
decision, I have drawn only those conclusions that are reasonable, logical, and based
on the evidence contained in the record. Likewise, I have avoided drawing inferences
grounded on mere speculation or conjecture.
Under Directive ¶ E3.1.14, the Government must present evidence to establish
controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “[t]he applicant is
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or
mitigate facts admitted by the applicant or proven by Department Counsel, and has the
ultimate burden of persuasion as to obtaining a favorable clearance decision.” Section 7
of Executive Order 10865 provides: “[a]ny determination under this order adverse to an
applicant shall be a determination in terms of the national interest and shall in no sense
be a determination as to the loyalty of the applicant concerned.”
A person applying for access to classified information seeks to enter into a
fiduciary relationship with the Government predicated upon trust and confidence. This
relationship transcends normal duty hours and endures throughout off-duty hours. The
Government reposes a high degree of trust and confidence in individuals to whom it
FORM at 4.13
5
grants access to classified information. Decisions include, by necessity, consideration of
the possible risk the applicant may deliberately or inadvertently fail to protect or
safeguard classified information. Such decisions entail a certain degree of legally
permissible extrapolation as to potential, rather than actual, risk of compromise of
classified information.
Analysis
Guideline F, Financial Considerations
The security concerns relating to the guideline for financial considerations are set
out in AG ¶ 18:      
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. 
Department Counsel argued that the evidence established security concerns
under three Guideline F DCs, as set forth in AG ¶ 19: 
(a) inability or unwillingness to satisfy debts;
(c) a history of not meeting financial obligations; and
(g) failure to file annual Federal, state, or local income tax returns as
required or the fraudulent filing of the same.  13
The SOR only alleges eight different failures to file federal and state annual
income tax returns. It does not allege any delinquent debt, nor is there any evidence of
delinquent debt concerning any of the tax years alleged in the SOR. Applicant admitted
owing $309.39 for his 2004 state income taxes, but that year was not the subject of any
SOR allegation. Accordingly, there is no evidence to support application of DC 19(a) or
(c). However, DC 19(g) was clearly established by Applicant’s several admissions,
thereby shifting the burden to Applicant to rebut, extenuate, or mitigate the resulting
security concerns. 
The guideline includes three conditions in AG ¶ 20 that could mitigate security
concerns arising from Applicant’s failure to file required income tax returns:
(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
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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, or a death, divorce or
separation), and the individual acted responsibly under the circumstances;
and
(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. 
Applicant failed to provide any evidence to corroborate his claim that he finally
filed his federal and state income tax returns, for tax years 2004 through 2009,
sometime between late-February and mid-April 2010. Even if he did so, however, his
failure to file required tax returns up until that time (well after his receipt of the SOR and
around the time he received the FORM) was recent. The failures to file were also
frequent, occurring in each of the past five years. He continued to “procrastinate” until
clearly faced with the imminent denial of his security clearance, and offered no evidence
to suggest that such conduct is unlikely to recur. Applicant’s lengthy and blatant
disregard for his obligation to file annual income tax returns continues to cast doubt on
his reliability, trustworthiness, and judgment, so the evidence does not support the
application of MC 20(a). 
Applicant attributed his failure to file tax returns to a “mental block” that caused
him to “procrastinate.” He offered no evidence of any condition beyond his control that
led to his sustained and repeated failures to meet his obligations to federal and state tax
authorities. Finally, he provided nothing to substantiate that he acted responsibly under
the circumstances, so no mitigation under MC 20(b) was established.
Applicant claims to have retained a tax preparation service to assist him in filing
his delinquent income tax returns, but provided no evidence to substantiate this claim.
He also failed to provide evidence that the problem has been resolved or is under
control. Finally, if his claims are true, the only apparent reason that he finally complied
with his legal obligations in that regard was the pending denial of his security clearance.
He provided no evidence to suggest that he would meet these responsibilities in the
future absent such motivation. Accordingly, he failed to prove mitigation under MC
20(c). 
MC 20(d) and 20(e) concern resolution or illegitimacy of delinquent debts, which
were not alleged in this case. MC 20(f) deals with unexplained affluence, and likewise
has no bearing on the allegations in this case. Accordingly, Applicant did not
demonstrate the applicability of any MC under Guideline F. 
7
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 relevant circumstances. The administrative judge should consider the
nine adjudicative process factors listed at AG ¶ 2(a): 
(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), the ultimate determination of whether to grant eligibility for a security
clearance must be an overall commonsense judgment based upon careful consideration
of the guidelines and the whole-person concept.     
I considered the potentially disqualifying and mitigating conditions in light of all
relevant facts and circumstances surrounding this case. Applicant is a mature and
experienced individual, who is responsible for his voluntary choices and conduct that
underlie the security concerns expressed in the SOR. He offered no legitimate reason
for his recurring and recent disregard of his legal obligations to file federal and state
income tax returns since 2005. 
Even if Applicant’s claim to have recently filed all past-due returns is true, he did
so only in an attempt to avoid denial of the security clearance he is seeking, and not out
of any expressed sense of responsibility. Compliance under such circumstances does
not demonstrate rehabilitation or make recurrence less likely. It also does little to
alleviate the concerns about his reliability and willingness to abide by rules and
regulations, which continue to cast doubt on his trustworthiness and ability to protect
classified information. Security-related procedures require compliance without regard to
whether actual compromise would result, so Applicant’s failure to comply with his
income tax filing obligations supports security concerns without regard to whether he
owed additional tax, or was due a refund.  
Overall, the record evidence creates substantial doubt as to Applicant’s present
eligibility and suitability for a security clearance. For all these reasons, I conclude
Applicant has not mitigated the security concerns arising from his financial
considerations. 
8
Formal Findings
Formal findings for or against Applicant on the allegations set forth in the SOR,
as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are:
Paragraph 1, Guideline F: AGAINST APPLICANT
Subparagraphs 1.a through 1.h: Against Applicant
Conclusion
In light of all of the circumstances presented by the record in this case, it is not
clearly consistent with the interests of national security to grant Applicant eligibility for a
security clearance. Eligibility for access to classified information is denied.
                                              
DAVID M. WHITE
Administrative Judge