1
                                                             
                           DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
            
In the matter of: )
)
)
[NAME REDACTED] )       ISCR Case No. 14-02387
)
)
Applicant for Security Clearance )
Appearances
For Government: Braden Murphy, Esq., Department Counsel
For Applicant: Pro se
______________
Decision
______________
MALONE, Matthew E., Administrative Judge:
Applicant did not mitigate the security concerns raised by her failure to timely file
her tax returns or pay her taxes. She also has several past-due or delinquent debts that
have not been paid or otherwise resolved. Also, Applicant has held a security clearance
for almost 25 years, but deliberately withheld from her most recent security clearance
application relevant and material information about her finances. Her request for
continued access to classified information is denied.
Statement of the Case
On October 24, 2013, Applicant submitted an Electronic Questionnaire for
Investigations Processing (EQIP) to renew a security clearance required for her
employment at a defense contractor. Based on the results of the ensuing background
investigation, Department of Defense (DOD) adjudicators could not determine that it is
  Required by Executive Order 10865, as amended, and by DOD Directive 5220.6 (Directive), as amended.1
 The adjudicative guidelines were implemented by the Department of Defense on September 1, 2006. These2
guidelines were published in the Federal Register and codified through 32 C.F.R. § 154, Appendix H (2006).
 See Directive, E3.1.7. A copy of Department Counsel’s request for hearing is included in the record as3
Hearing Exhibit (Hx.) 1.
 An index of the Government’s exhibits is included in the record as Hx. 2.4
2
clearly consistent with the national interest for Applicant to continue to hold a security
clearance.  1
On July 29, 2014, DOD issued to Applicant a Statement of Reasons (SOR)
alleging facts which raise security concerns addressed under the adjudicative
guidelines  for personal conduct (Guideline E) and financial considerations (Guideline2
F). Applicant timely responded to the SOR (Answer) and requested a decision without a
hearing. However, Department Counsel for the Defense Office of Hearings and Appeals
(DOHA) timely requested a hearing,  and the case was assigned to me on November3
18, 2014. I convened a hearing on December 18, 2014. Department Counsel presented
Government Exhibits (Gx.) 1 - 4.   Applicant testified and presented Applicant’s Exhibits4
(Ax.) A - F. All exhibits were  admitted without objection. DOHA received the transcript
of hearing (Tr.) on January 6, 2015.
Findings of Fact
Under Guideline F, the Government alleged that Applicant failed to file her
federal income tax return as required for tax year 2009 (SOR 1.a); and that she owes
$11,810 for unpaid income tax for tax years 2008 (SOR 1.b) and 2010 (SOR 1.c). It was
also alleged that she owed $9,761 (SOR 1.e) and $40,000 (SOR 1.f) for two  delinquent
mortgage accounts. Finally, it was alleged that Applicant owed $14,352 for eight
delinquent or past-due personal credit accounts (SOR 1.d, 1.g - 1.m). Applicant
admitted all of the Guideline F allegations.
Under Guideline E, the Government cross-alleged as a personal conduct
concern the failure to file a tax return alleged in SOR 1.a (SOR 2.a). The Government
also alleged that Applicant deliberately made false official statements by omitting from
her October 2013 EQIP her failure to file her 2009 tax return (SOR 2.b); by omitting her
2008 and 2010 tax debts (SOR 2.c); and by omitting the past-due or delinquent debts
alleged at SOR 1.d - 1.m (SOR 2.d). As to SOR 2.a, she relied on her response to SOR
1.a. As to SOR 2.b and 2.c, Applicant denied both allegations. She admitted with
explanation the SOR 2.d allegation; however, her explanation made clear that she
denies that she intended to make a false statement through her omission.
In addition to the facts established by Applicant’s admissions, I make the
following findings of fact:
3
Applicant is 50 years old and has been employed by the same defense
contractor as a contracts administrator since March 1988. She has held a secret-level
security clearance for most of her career there, and she is currently applying for a top
secret clearance. Applicant is an excellent employee whose most recent performance
evaluations rate her work as exceeding expectations. (Gx. 1; Ax. F; Tr. 32)
Applicant and her husband have been married since June 1986. They have two
children, ages 27 and 23, whom they supported through their college educations and
beyond. Applicant and her husband still provide occasional support to their older child,
but they are still fully supporting the younger child. (Gx. 1; Tr. 36 - 37, 74 - 75)
Applicant earns about $75,000 annually. Her husband is a brake operator at a
local industrial company, where he earns about $32,000 annually. He also earns about
$10,000 annually from a side business doing landscaping and yard work. Since 2007,
Applicant and her husband have used an online filing program and have filed tax returns
as “Married, Filing Separately.” She testified they do this to get tax benefits for his small
business, and because her husband could, until recently, lessen his tax liability by
claiming their children as dependents on his tax return. Applicant did not otherwise
elaborate about what those tax benefits would be. (Gx. 4; Tr. 36, 44 - 46, 68 - 70)
Starting in 2007, Applicant incurred tax debts that she did not pay. In addition to
the $11,810 tax debt alleged in the SOR, Applicant also owes $4,476 for the 2009 tax
year and $3,794 for the 2012 tax year. That debt was identified after Applicant filed her
2009 federal income tax return on July 21, 2014. As of the date of this hearing,
Applicant also had not yet filed her federal income tax return for the 2013 tax year. (Gx.
4; Ax. A; Tr. 42 - 46, 57 - 59)
As to efforts at resolving the tax debts at SOR 1.b and 1.c, Applicant claimed in
her Answer that “[a] payment agreement has been accepted and established by IRS on
July 22, 2014.” Available information shows Applicant made four payments on her 2007
tax debt between July 2013 and June 2014 totaling $1,835. For the 2007, 2008, 2010,
and 2012 tax years, her total debt for unpaid taxes as of July 7, 2014, was $21,509.52.
Applicant did not document any other payments to the IRS. Applicant also claimed that
she has filed her state income tax returns as required, but she could not explain how
she did so without first calculating her federal income taxes each year. (Answer; Ax. A;
Tr. 40 - 42, 70 - 71)
As to her other debts, Applicant claimed they were caused when her husband
was laid off in 2012. He was unemployed between August and October of that year.
Applicant claimed she has made arrangements to resolve the debt at SOR 1.d, incurred
for the purchase of a personal computer, by settling the account for half the total
balance. However, aside from her testimony, her claim is not supported in the record.
Applicant continued to work and earn income while her husband was unemployed.
(Answer; Gx. 2; Gx. 3; Tr. 46 - 47)
4
The debts at SOR 1.e and 1.f are for amounts past due on a second mortgage
for $40,000 obtained in May 2003. The mortgage is now held by a collection agency
with whom Applicant claimed she has made repayment arrangements. As of the
hearing, she was two weeks late in the payment due in December 2014. (Answer; Gx.
2; Gx. 3; Ax. E; Tr. 48, 72)
The debts at SOR 1.g and 1.h are for past-due bills for dental treatment.
Applicant provided an account statement from her dentist that showed treatment in
October 2014 for which she had only partially paid, and which showed a previous
unpaid balance of $629 and a current balance due of $780. Applicant did not document
any payments on this account. (Answer; Gx. 2 - 3; Ax. D; Tr. 51)
The debts at SOR 1.i and 1.j are debts incurred for the purchase of a personal
computer by her husband. On the day of this hearing, Applicant reached a repayment
agreement with the collection agency holding this debt. The first of 12 monthly
payments of $213 was to be made the next day. (Answer; Gx. 2 - 3; Ax. B; Tr. 52 - 53)
Also on the day of her hearing, Applicant reached a repayment agreement with
the creditor for the debt at SOR 1.k. The deal calls for five monthly payments between
December 2014 and April 2015 for a total of $545. (Answer; Gx. 2; Ax. C; Tr. 53)
As to the debts at SOR 1.l and 1.m, Applicant averred in her Answer that she had
paid or had made arrangements to pay both accounts. At hearing, she stated that SOR
1.l was for a credit card she let her younger child use while at school. As to SOR 1.m,
despite her claimed resolution in response to the SOR, she testified at hearing that she
does not know what the debt at SOR 1.m is for. (Answer; Gx. 2; Tr. 54 - 56)
When Applicant submitted her EQIP, she answered “no” to all of the questions in
Section 26 regarding past-due or delinquent debts, including failure to file tax returns
and unpaid taxes. As to her failure to list that she had not filed her 2009 tax return on
time, as alleged in SOR 2.b, Applicant claimed she was unaware when she submitted
her EQIP that the return was not processed for filing by the online tax program she
used. However, at hearing, she testified that the online tax program, which she has
used since 2007, usually sent an email confirming that her return was processed and
accepted. She testified she did not receive such an email for her 2009 return in 2010,
but “assumed that it went through and it was more than a year later that [she] found out
it did not go through.” Based on her testimony, Applicant knew in 2011 or 2012, that her
2009 return had not been filed. Yet she went on to testify that she only became aware
after she submitted her EQIP in 2013 that the 2009 return had not been filed. During the
hearing, it was also shown that she had not filed her 2013 tax year returns. I find
Applicant’s response to the SOR and her testimony on these matters to be inconsistent
with the record evidence and not credible. Accordingly, I conclude she intended to
conceal her failure to file her 2009 tax return. (Answer; Gx. 1; Gx. 4; Ax. A; Tr. 34, 40 -
42)
 See Directive. 6.3.5
5
Applicant’s denial that her omission of her 2008 and 2010 tax debts, as alleged in
SOR 2.c, was intentional. Instead she claimed that those tax debts have been paid and
that “payment arrangements have been set up for tax year 2009.” This is simply not
true, as shown by the IRS information in Ax. A. Also, Applicant also incurred a debt for
unpaid taxes in 2007 that she failed to list in her 2013 EQIP. Applicant testified that she
is now paying $100 a month toward some or all of her tax debts, but she did not support
her claim with reliable documentation. (Answer; Gx. 4; Tr. 42 - 46)
As to the debts at SOR 1.d - 1.m, the Government’s information shows that those
debts have been delinquent since between 2007 and 2012. Applicant was interviewed in
December 2013 by a Government investigator. In reviewing her answers to financial
questions in Section 26 of the EQIP, Applicant confirmed that she did not have any
debts that she should report as required by the questions therein. She was then
confronted with the contents of a credit report that showed numerous debts, including
those alleged in SOR 1.d - 1.m. Applicant claimed she either misread pertinent
questions about certain debts or that she did not list her debts because she did not
know their status. (Gx. 2; Gx. 3; Tr. 62 - 63, 70)
Applicant is responsible for managing her family’s finances, but admits she has
no idea how much they have remaining each month after expenses, and she
acknowledges they generally live paycheck to paycheck. (Tr. 63 - 65, 74 - 75) 
Policies
Each security clearance decision must be a fair, impartial, and commonsense
determination based on examination of all available relevant and material information,5
and consideration of the pertinent criteria and adjudication policy in the adjudicative
guidelines (AG). Decisions must also reflect consideration of the factors listed in ¶ 2(a)
of the guidelines. Commonly referred to as the “whole-person” concept, those factors
are:
(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. 
The presence or absence of a disqualifying or mitigating condition is not
determinative of a conclusion for or against an applicant. However, specific applicable
guidelines should be followed whenever a case can be measured against them as they
 See Department of the Navy v. Egan, 484 U.S. 518 (1988).6
 See Egan, 484 U.S. at 528, 531.7
 See Egan; AG ¶ 2(b).8
6
represent policy guidance governing the grant or denial of access to classified
information.
A security clearance decision is intended only to resolve whether it is clearly
consistent with the national interest  for an applicant to either receive or continue to6
have access to classified information. The Government bears the initial burden of
producing admissible information on which it based the preliminary decision to deny or
revoke a security clearance for an applicant. Additionally, the Government must be able
to prove controverted facts alleged in the SOR. If the Government meets its burden, it
then falls to the applicant to refute, extenuate or mitigate the Government’s case.
Because no one has a “right” to a security clearance, an applicant bears a heavy
burden of persuasion.  7
A person who has access to classified information enters into a fiduciary
relationship with the Government based on trust and confidence. Thus, the Government
has a compelling interest in ensuring each applicant possesses the requisite judgment,
reliability and trustworthiness of one who will protect the national interests as his or her
own. The “clearly consistent with the national interest” standard compels resolution of
any reasonable doubt about an applicant’s suitability for access in favor of the
Government.8
Analysis
Financial Considerations
Available information is sufficient to support all of the SOR allegations. The facts
raise a security concern about Applicant’s finances that is addressed, in relevant part, at
AG ¶ 18, as follows:
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.
Since 2007, Applicant has incurred unpaid tax debts, she has not filed federal
income tax returns on time for at least two of the past five tax years, and she has
accrued mortgage and other personal credit delinquencies that have not been timely
addressed in any meaningful way. All of the foregoing supports application of the
7
disqualifying conditions at AG ¶ 19(a) (inability or unwillingness to satisfy debts); AG ¶
19(c) (a history of not meeting financial obligations); and AG ¶ 19(g) (failure to file
annual Federal, state, or local income tax returns as required or the fraudulent filing of
the same).
I have also considered the following pertinent AG ¶ 20 mitigating conditions:
(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 emergency, or a death, divorce or
separation), and the individual acted responsibly under the circumstances;
(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;
(d) the individual initiated a good-faith effort to repay overdue creditors or
otherwise resolve debts; and 
(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.
None of these mitigating conditions apply. Applicant’s financial problems are
ongoing in view of her failure to act to resolve her debts in a timely and good-faith
manner. Applicant’s husband’s lay-off in 2012 is only a small factor in her financial
problems, as many of her debts, including unpaid taxes for 2007, 2008, and 2010, were
already delinquent before 2012. Also, Applicant continued to earn income during her
husband’s relatively brief unemployment, and she did not show that she has acted
reasonably in response to her debts. Most of her actions to correct some of her debts
occurred at or near the day of her hearing in this matter. She also did not establish that
she has a plan to resolve her debts; she has not received any counseling or other
professional help to manage her finances; and she and her husband are living paycheck
to paycheck. In summary, Applicant has failed to mitigate the Government’s security
concerns under this guideline. 
Personal Conduct
Available information shows that Applicant has not filed her federal income tax
returns as required on more than one occasion; and that she deliberately omitted from
8
her EQIP in 2013 relevant information about her tax obligations and about her finances.
These facts raise security concerns about Applicant’s personal conduct and reliability
that are addressed at AG ¶ 15, as follows:
Conduct involving questionable judgment, lack of candor, dishonesty, or
unwillingness to comply with rules and regulations can raise questions
about an individual's reliability, trustworthiness and ability to protect
classified information. Of special interest is any failure to provide truthful
and candid answers during the security clearance process or any other
failure to cooperate with the security clearance process.
Specifically, the record requires application of the following AG ¶ 16 disqualifying
condition:
(a) deliberate omission, concealment, or falsification of relevant facts from
any personnel security questionnaire, personal history statement, or
similar form used to conduct investigations, determine employment
qualifications, award benefits or status, determine security clearance
eligibility or trustworthiness, or award fiduciary responsibilities.
Applicant’s failure to file her 2009 income tax return falls within the general
statement of concern under this guideline. Her conduct regarding her tax obligations
indicates a general disregard for routine rules and regulations. Applicant denies
knowingly falsifying her answers to EQIP questions about her finances. However, based
on all of the facts and circumstances, including Applicant’s conflicting statements and
testimony about her finances, I conclude the totality of facts and circumstances
probative of this issue show she intended to withhold information from the Government.
Applicant’s debts and unpaid taxes were incurred long before she submitted her EQIP.
Applicant has held a security clearance for most of her 25-year tenure with her
employer. She is, or should be, familiar with the questions asked in a security
questionnaire. She also should be aware of the need to be candid and forthcoming
about information needed by the Government to assess her suitability for clearance. 
In response to the Government’s information in this case, Applicant did not
provide information that supports any of the mitigating conditions at AG ¶ 17. Rather
than make a prompt, good-faith effort to correct her falsifications at her subject interview
in 2013, she stood by her negative EQIP answers before being confronted with her
credit report by the Government investigator. At hearing, Applicant’s explanations for
why she did not report her tax information or other debts were simply not credible. On
balance, there remain substantial security concerns about Applicant’s honesty and her
judgment.
I also have evaluated this record in the context of the whole-person factors listed
in AG ¶ 2(a). The positive information about Applicant’s job performance is not sufficient
to overcome the doubts about her suitability for access to classified information that
have been raised by the Government’s information. Because protection of the national
9
interest is the principal goal of these adjudications, those doubts must be resolved
against the Applicant.
Formal Findings
Formal findings 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
Subparagraphs 1.a - 1.m: Against Applicant
Paragraph 2, Guideline E: AGAINST APPLICANT
Subparagraphs 2.a - 2.d: Against Applicant
Conclusion
In light of all of the foregoing, it is not clearly consistent with the national interest
for Applicant to have access to classified information. Applicant’s request for a security
clearance is denied.
MATTHEW E. MALONE
Administrative Judge