KEYWORD: Guideline F
DIGEST: The Appeal Board cannot consider new evidence on appeal.  An ability to argue for an
alterative interpretation of the evidence is not sufficient to show that the Judge erred.  Hearing
Office decision are not binding on other Hearing Office Judges or on the Appeal Board.  Adverse
decision affirmed.   
CASE NO: 11-11455.a1
DATE: 02/04/2014
DATE: February 4, 2014
In Re:
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Applicant for Security Clearance
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ISCR Case No. 11-11455
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
James B. Norman, Esq., Chief Department Counsel
FOR APPLICANT
Alan V. Edmunds, Esq.
The Department of Defense (DoD) declined to grant Applicant a security clearance.  On July
9, 2013, DoD issued a statement of reasons (SOR) advising Applicant of the basis for that
decision—security concerns raised under Guideline F (Financial Considerations) of Department of
Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive).  Applicant requested a hearing.
On November 14, 2013, after the hearing, Defense Office of Hearings and Appeals (DOHA)
Administrative Judge Edward W. Loughran denied Applicant’s request for a security clearance.
Applicant appealed, pursuant to the Directive ¶¶ E3.1.28 and E3.1.30.  
1Three other debts were listed in the SOR in addition to Applicant’s delinquent federal income tax debt.    The
Judge found that these debts were either paid by Applicant or successfully disputed.  The Judge made favorable formal
findings regarding these debts.
2
Applicant raises the following issue on appeal:  whether the Judge’s decision is arbitrary,
capricious, or contrary to law.  For the following reasons, the Board affirms the Judge’s unfavorable
security clearance decision.
The Judge found: Applicant is 46 years old.  He is part owner of a Subchapter S corporation,
along with at least two other owners.  One of the owners had a friend who acted as bookkeeper and
prepared the corporate tax returns, as well as the owner’s individual tax returns.  The bookkeeper
did not prepare the tax returns for several years.  In about 2010, the corporate and Applicant’s
individual tax returns for several years were prepared and filed.  Applicant stated that the
bookkeeper incorrectly subscribed all of the corporation’s income to him, instead of dividing it
among the owners.  A witness verified Applicant’s description of the tax problems caused by his
corporation and his corporations’s bookkeeper.  Applicant stated that he did not note the discrepancy
because he was heavily involved in a child custody battle.  The IRS determined that Applicant owed
taxes for several years.  In July 2011, the IRS filed a $42,256 tax lien against Applicant.  
From 2010 to 2012, Applicant went through a contentious and costly child custody battle that
cost him about $45,000.  This expense added to his financial problems and prevented him from
addressing his delinquent taxes.  Applicant testified that he paid the IRS about $4,000 for his tax
debt.  He admitted that he had not made any payments since about 2011.  Applicant contracted with
a tax consulting company in February 2013 to represent him before the IRS.  He also has an
accountant who is preparing documents for the tax consulting company.  The company agreed to
review his tax records and negotiate with the IRS.  The company may prepare amended tax returns
that will lower his tax liability to about $21,000.  Applicant stated that the tax company is close to
arriving at an agreement with the IRS.  He indicated that he will pay whatever amount is agreed
upon.  
Applicant filed his 2011 federal income tax return in about September 2013.  He states that
there is no amount owing for 2011.  He expects to file his 2012 federal income tax return within a
few days.  He expects to owe the IRS about $5,000.  Applicant’s state tax situation is dubious.  He
has not filed state income tax returns in the state where he spends the most time because he
considers his permanent residence to be in another state.  He admits that he likely owes state income
taxes.  He states that he will address any delinquent state taxes after he resolves his federal taxes.1
The Judge concluded: Applicant relied on his corporation’s bookkeeper to prepare his tax
returns and the bookkeeper did not fulfill his responsibilities in a timely manner.  However, the
responsibility to file his tax returns and pay his taxes ultimately rests on Applicant.  His tax debt was
not caused by conditions that were beyond his control.  Applicant has known since at least 2010 that
he had tax problems, and that they were of interest to DoD.  There is insufficient evidence to
determine that Applicant’s financial problems will be resolved within a reasonable period.  He did
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not act responsibly under the circumstances and he did not make a good-faith effort to resolve all
his financial problems.  His financial issues are recent and ongoing, and it cannot be determined that
they are unlikely to recur.  Financial concerns remain despite the presence of some mitigation.
Applicant’s significant unresolved tax problems are inconsistent with the holding of a security
clearance.
Applicant asserts that he has established a case for mitigation of the government’s security
concerns.  He states that his debts were caused by third parties and were out of his control, that the
debts are lone incidents in a multiple decade career, are infrequent, and are in no way indicative of
behavior likely to recur.  He states that a payment plan is now in place, that an agreement with the
IRS has been reached, and he has begun his payment plan.  Applicant’s arguments do not establish
error on the part of the Judge.    
Applicant’s statements regarding the tax payment plan, agreement with the IRS, and the
commencement of payments under the plan are assertions of fact that fall outside the case record.
The Board cannot consider new evidence on appeal.  See Directive ¶ E3.1.29. 
 The presence of some mitigating evidence does not alone compel the Judge to make a
favorable security clearance decision.  See, e.g., ISCR Case No. 06-25157 at 2 (App. Bd. Apr. 4,
2008).  As the trier of fact, the Judge has to weigh the evidence as a whole and decide whether the
favorable evidence outweighs the unfavorable evidence, or vice versa.  See, e.g., ISCR Case No. 06-
10320 at 2 (App. Bd. Nov. 7, 2007).  A party’s disagreement with the Judge’s weighing of the
evidence, or an ability to argue for a different interpretation of the evidence, is not sufficient to
demonstrate the Judge weighed the evidence or reached conclusions in a manner that is arbitrary,
capricious, or contrary to law.  See, e.g., ISCR Case No. 06-17409 at 3 (App. Bd. Oct. 12, 2007).
Applicant’s appeal brief essentially argues for an alternate interpretation of the record evidence.
In this case, the Judge made sustainable findings that Applicant had a significant history of
not filing returns and not paying his income taxes in a timely fashion.  He emphasized that
Applicant’s case consisted largely of his intentions to pay off his taxes in the future and noted that
such intentions were not a substitute for a track record of debt repayment.  The Judge’s conclusion
that Applicant’s tax difficulties were ultimately not matters beyond his control is sustainable on this
record.  The Judge listed the potentially applicable mitigating conditions and then discussed several
components of those factors in his analysis, partially applying some of them.  The Judge found in
favor of Applicant as to three of the Guideline F allegations.  However, the Judge offered a
reasonable explanation as to why the disqualifying conduct under Guideline F as evidenced by tax
delinquencies was not fully mitigated.  Applicant has not demonstrated that the Judge erred when
he weighed matters in mitigation against the seriousness of that disqualifying conduct.  Applicant
has cited to a Hearing Office case that, he contends, supports his effort to secure a reversal of the
Judge’s decision.  We give this case due consideration.  However, hearing office cases are not
binding on other Hearing Office Judges or on the Appeal Board.  See, e.g., ISCR Case No. 11-10178
at 3 (App. Bd. Aug. 29, 2013).  The cited case is not sufficient to show that the Judge erred in
denying Applicant a clearance.     
4
The Board does not review a case de novo.  The favorable evidence cited by Applicant is not
sufficient to demonstrate the Judge’s decision is arbitrary, capricious, or contrary to law.  See, e.g.,
ISCR Case No. 06-11172 at 3 (App. Bd. Sep. 4, 2007).  After reviewing the record, the Board
concludes that the Judge examined the relevant data and articulated a satisfactory explanation for
the decision, “including a ‘rational connection between the facts found and the choice made.’”
Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983) (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).  “The
general standard is that a clearance may be granted only when ‘clearly consistent with the interests
of the national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).  Therefore,
the Judge’s ultimate unfavorable security clearance decision is sustainable.
Order
The decision of the Judge is AFFIRMED.
Signed: Michael Y. Ra’anan         
Michael Y. Ra’anan
Administrative Judge
Chairperson, Appeal Board
Signed: Jeffrey D. Billett              
Jeffrey D. Billett
Administrative Judge
Member, Appeal Board
Signed: James E. Moody            
James E. Moody
Administrative Judge
Member, Appeal Board