DEPARTMENT OF DEFENSE
         DEFENSE OFFICE OF HEARINGS AND APPEALS
          
             
In the matter of: )
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 )     ISCR Case No.15-08304
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Applicant for Security Clearance                   )    
Appearances
For Government: Robert Blazewick, Esq. Department Counsel
For Applicant: Zekiah N. Wright
                                                                            
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Decision
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LYNCH, Noreen, A., Administrative Judge:
On July 30, 2016, The Department of Defense (DOD) issued a Statement of
Reasons (SOR) to Applicant alleging security concerns arising under Guideline F
(Financial Considerations). The action was taken under Executive Order (EO) 10865,
Safeguarding Classified Information within Industry (February 20, 1960), as amended;
DOD 5220.6, Defense Industrial Personnel Security Clearance Review Program
(January 2, 1992), as amended (Directive); and the Adjudicative Guidelines (AG)
implemented in September 2006. Revised Adjudicative Guidelines were issued on
December 10, 2016, and became effective on June 8, 2017.1
Applicant timely answered the SOR and requested a hearing. The case was
assigned to me on February 15, 2017. A notice of hearing was issued on April 17,
2017, scheduling the hearing for August 4, 2017. Government Exhibits (GX) 1-5 were
In this case, the SOR was issued under Adjudicative Guidelines effective within the Defense Department      1
on September 1, 2006. Revised Adjudicative Guidelines became effective June 8, 2017. My decision and
formal findings under the revised Guideline F would not be different under the 2006 Guidelines.
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admitted into evidence without objection. Applicant testified and submitted Applicant
Exhibits (AX) A-V admitted into the record without objection. The transcript was
received on August 10, 2017. Based on a review of the pleadings, testimony, and
exhibits, eligibility for access to classified information is granted. 
Findings of Fact
In her answer to the SOR, Applicant admitted the allegation in SOR ¶ 1.b, and
denied allegations ¶¶ 1.a and 1.c. She provided explanations for the allegations under
Guideline F (Financial Considerations).  
Applicant is a 60-year-old senior subject analyst for a defense contractor. She is
divorced and has one daughter. She obtained her undergraduate degree in 2001 and
her master’s in 2004 in taxation. She is also a certified public accountant (CPA). She
has worked for her current employer since 2014.  She completed her security clearance
application (SCA)  in January 2015, and she has held a security clearance for 10 years.
(GX 1)
Financial Considerations
The SOR alleges that Applicant failed to file her Federal and state income tax
returns for tax years 2011 through 2014, as required; that she has an unpaid 2013
judgment in the amount of $2,300; and that she is indebted to the state for delinquent
taxes for tax year 2014 in the amount of $1,693.
Applicant stated that this is the first time since she started filing income tax
returns that she did not file her tax returns timely. She requested extensions of time to
file but in some instances, she was forced to file outside of the extension date. The
main reason for the delayed filings arose from a catastrophic event that occurred in her
home while she was away on travel. When she returned home from travel, she learned
that the water pipes had burst in her home and due to all the damage caused by the
water, she lost belongings, and critical paperwork. As a result, the necessary
documentation for the filing of her tax return was lost. At the hearing, Applicant
explained that she needed documentation for the tax years to substantiate her
deductions and business expenses.
She elaborated that from 2010 to 2013, she had several operations which
lessened her earnings. (Tr. 37) She had to leave a full-time job in 2013 due to her
health.  At the time of November 2013 to November 2014, Applicant was self-employed
as a real estate agent. Applicant had some delinquent accounts during that time but all
have been paid as verified by her credit report. (GX 4) 
Applicant disclosed in her SCA that she failed to file her tax returns and
explained during her 2015 investigative interview that she always prepares her tax
returns herself as she has the knowledge and expertise to do so. (Tr. 25) She also
keeps her documentation in a secure place to avoid any future problems.
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As to SOR allegation 1.a, Applicant contacted the IRS in 2011 and was granted
an extension. She began to contact banks and other companies to obtain all the
necessary information that she needed to substantiate her deductions and obtain
1099s. (Tr. 42) This took some time. Applicant wanted to be meticulous in her filings, so
each year, she had to request an extension. Her plan was to start with the most recent
tax years, as some of the 1099s for the earlier tax years could not be easily located.
She contacted banks, investment companies, and credit card companies. (Tr. 48) She
had to wait for statements and copies of checks.
Applicant explained that she filed the Federal and state tax returns for the years
2015 and  2014, which were filed together in the year 2016. She explained that there
was a mixture of refunds and tax owed for the various years. (Tr. 25) She filed the
2013, 2012, and 2011 tax returns in 2016 and 2017. She has paid all taxes that were
owed to either Federal or state. (AX C-P) For tax years 2014 and 2015, Applicant made
a voluntary estimated tax payment to the IRS and the state. She is current with all
Federal and state tax filings at this time. Also, Applicant paid the IRS in advance of
them processing her tax return. She was proactive and acted in good-faith in an
unfortunate situation. She was credible when she stated that upon contacting the IRS,
she learned that tax law states a person has three years (if you do not owe any tax)
from the date of filing to obtain a refund. After that, one forfeits the refund. (Tr. 28)
As to SOR allegation 1.b, the 2013 judgment ($2,300) was the result of a
property dispute. Applicant was the Plaintiff in the case. However, she was ill for the
court date and could not attend. She sent her adult daughter with a physician’s note
asking for a continuance, but the court did not grant the continuance. (Tr. 33) The
defendant countersued. (Tr. 34)  Applicant was again ill and in the hospital in 2013. She
could not locate the defendant to pay him. She contacted his law firm, but the attorney
was no longer with the firm. She called the District Court, but learned that she could not
make the payment to them. She finally located the attorney and issued a check to the
person. The check was cashed two days later but he did not file a notice of satisfaction
of judgment immediately. The payment of $2,300 was made in August 2016, and a
notice of satisfaction was issued in September 2016. (AX R)
As to SOR allegation 1.c, Applicant owed $1,693 to the state for delinquent taxes 
for tax year 2014. She satisfied the amount with a refund from 2015. (AX Q )
At the hearing, Applicant stated that she understands the importance of accuracy
in her tax filings. She has never had any difficulty handling her finances or filing tax
returns. She pointed out that she co-signed a student loan for her daughter and the
loan is in deferment. She also included a payment receipt for a non-SOR debt that
appeared on her latest credit report. Her latest credit report reflect all accounts “pays as
agreed” and the student loan in deferment. (GX 4)
Applicant earns about $154,000 a year. She has both savings and retirement
accounts. She is current with all her financial obligations. She has discretionary income
at the end of the month in the approximate amount of $2,500. She lives within her
means and budgets.   
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Policies
When evaluating an applicant’s suitability for a security clearance, an
administrative judge must consider the adjudicative guidelines (AG). In addition to brief
introductory explanations for each guideline, the adjudicative guidelines list potentially
disqualifying conditions and mitigating conditions. These guidelines are not inflexible
rules of law. Instead, recognizing the complexities of human behavior, they are applied
in conjunction with the factors listed in the adjudicative process. An administrative
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision.
Under AG ¶ 2(c), this process is a conscientious scrutiny of a number of variables known
as the “whole-person concept.” An 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 national security
eligibility will be resolved in favor of 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.
The Government must present evidence to establish controverted facts alleged in
the SOR. An applicant is responsible for presenting “witnesses and other evidence to
rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by
Department Counsel. . . .”  The burden of proof is something less than a preponderance2
of evidence.  The ultimate burden of persuasion is on the applicant.  3 4
A person seeking access to classified information enters into a fiduciary
relationship with the Government based on 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 grants access to
classified information. Decisions include, by necessity, consideration of the possible risk
the applicant may deliberately or inadvertently fail to protect classified information. Such
decisions entail a certain degree of legally permissible extrapolation of potential, rather
than actual, risk of compromise of classified information.
 
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of
the national interest and shall in no sense be a determination as to the loyalty of the
applicant concerned.”  “The clearly consistent standard indicates that security clearance5
 See also ISCR Case No. 94-1075 at 3-4 (App. Bd. Aug. 10, 1995).      2
 Department of the Navy v. Egan, 484 U.S. 518, 531 (1988).      3
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      4
 See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive      5
information), and EO 10865 § 7.
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determinations should err, if they must, on the side of denials.”  Any reasonable doubt6
about whether an applicant should be allowed access to sensitive information must be
resolved in favor of protecting such information.  The decision to deny an individual a7
security clearance does not necessarily reflect badly on an applicant’s character. It is
merely an indication that the applicant has not met the strict guidelines the President
and the Secretary of Defense established for issuing a clearance.
Analysis
Guideline F, Financial Considerations
AG ¶ 18 expresses the security concern pertaining to financial considerations:
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 or sensitive information. Financial distress can also be
caused or exacerbated by, and thus can be a possible indicator of, other
issues of personnel security concern such as excessive gambling, mental
health conditions, substance misuse, or alcohol abuse or dependence. An
individual who is financially over-extended is at a greater risk of having to
engage in illegal or otherwise questionable acts to generate funds. 
Affluence that cannot be explained by known sources of income is also a
security concern insofar as it may result from criminal activity, including
espionage.
AG ¶ 19 describes conditions that could raise a security concern and may be
disqualifying:
(a) inability to satisfy debts;
(b) unwillingness to satisfy debts regardless of the ability to do so;
(c) a history of not meeting financial obligations; and
(f) failure to file or fraudulently filing annual  Federal, state, or local income
tax returns or failure to pay annual Federal, state, or local income tax as
required;
The Government produced credible evidence to establish the delinquent debts
and the failure to timely file federal and state tax returns from 2011 to 2014.
 ISCR Case No. 93-1390 at 7-8 (App. Bd. Jan. 27, 1995).      6
 Id.      7
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Consequently, the evidence is sufficient to raise disqualifying conditions ¶¶ 19(a), 19(c)
and 19(f).
AG ¶ 20 provides conditions that could mitigate the security concerns:
(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, clear
victimization by predatory lending practices, or identity theft), and the
individual acted responsibly under the circumstances;
(c) the person has received or is receiving 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; and
(g) the individual has made arrangement with the appropriate tax authority to file
or pay the amount owed and is in compliance with those arrangements.
Applicant’s late filing of Federal and state income tax returns was an anomaly.
She had always filed timely. However, due to the water damage and loss of documents
in her home and her illness and operations, she was late in her tax filings. She
requested extensions for each year. She acted responsibly by immediately collecting the
documentation that she needed to correctly file her income tax returns to substantiate
1099 income and her business deductions. She had a plan and followed through with it.
She made estimated tax payments in some cases. She provided documentation that
she has filed all the late Federal and state tax returns and has paid all taxes. She is
current with all tax filings and payments. She contacted the IRS and requested an
extension each year. She kept them apprised of the situation. MC AG ¶ 20 (a), (b), (d),
and (g) apply. She met her burden in this case to alleviate the security concerns under
the financial considerations guideline.
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 an applicant’s
conduct and all the circumstances. The administrative judge should consider the nine
adjudicative process factors listed at AG ¶2(d).
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(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. As noted above, the
ultimate burden of persuasion is on the applicant seeking a security clearance. 
I considered the potentially disqualifying and mitigating conditions in light of all the
facts and circumstances surrounding this case, as well as the whole-person factors.
 
Applicant is 60 years old. She is an educated woman who has worked and held a
security clearance for ten years. She has worked diligently and is a responsible person.
She is reliable and law-abiding. Due to extenuating circumstances, she did not timely file
her Federal and state income tax returns from 2011 to 2014. She has rectified the
situation. She has no delinquent debts. She explained the situation that occurred with
the 2013 judgment. Applicant has no negative record with respect to employment or
criminal activity. 
After weighing the disqualifying and mitigating conditions under Guideline F, and
evaluating all the record evidence in the context of the whole person, I conclude
Applicant has mitigated the security concerns under Guideline F. Accordingly, I conclude
that she has carried her burden of showing that it is clearly consistent with the national
interest to grant her eligibility for access to classified information.
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:  FOR APPLICANT
Subparagraphs 1.a-1.c:  For Applicant
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Conclusion
In light of all of the circumstances presented by the record in this case, it is 
clearly consistent with the national interest to grant Applicant a security clearance.
Clearance is granted. 
                                                     
NOREEN A. LYNCH
Administrative Judge
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