1 
 
 
 
                 DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
 
 
 
 
In the matter of:  ) 
 ) 
  (Redacted)  )   ISCR Case No. 16-01875 
   ) 
Applicant for Security Clearance  ) 
 
 
Appearances 
 
For Government: Carroll J. Connelley, Esq., Department Counsel 
For Applicant: Pro se 
 
 
______________ 
 
Decision 
______________ 
 
 
MATCHINSKI, Elizabeth M., Administrative Judge: 
 
Applicant’s record of delinquency includes a federal tax lien of $22,166 from 2010, deficiency 
balances of $3,852 and $3,301 on loans for repossessed vehicles, and a $536 collection debt. 
Applicant began repaying his income tax delinquency in August 2010 in varying amounts depending 
on the installment agreement. He still owes approximately $8,371 in federal tax debt and has yet to 
address one of the car loans, which had accrued to $5,056 as of April 2016. While he has made 
significant progress toward addressing his federal tax issues, he continues to display questionable 
financial judgment. Clearance is denied. 
 
Statement of the Case 
 
 On August 31, 2016, the Department of Defense Consolidated Adjudications Facility (DOD 
CAF) issued a Statement of Reasons (SOR) to Applicant, detailing the security concerns under 
Guideline F, financial considerations, and explaining why it was unable to find it clearly consistent 
with the national interest to grant or continue security clearance eligibility for him. The DOD CAF 
took the action under Executive Order (EO) 10865, Safeguarding Classified Information within 
Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel 
Security Clearance Review Program (January 2, 1992), as amended (Directive); and the 
Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG) effective 
within the DOD on September 1, 2006. 
 
On October 22, 2016, Applicant answered the SOR allegations and requested a hearing 
before an administrative judge from the Defense Office of Hearings and Appeals (DOHA). On March 
2, 2017, the case was assigned to me to conduct a hearing to determine whether it is clearly 
 
2 
 
consistent with the national interest to grant or continue a security clearance for Applicant. On March 
9, 2017, I scheduled a hearing for March 29, 2017.  
 
Due to an opening in the schedule, Applicant’s hearing was held on March 28, 2017 with the 
agreement of both parties. Two Government exhibits (GEs 1, 3) and five Applicant exhibits (AEs A-
E) were admitted into evidence without objection. A summarized report of subject interview was 
marked for identification as GE 2, but was withdrawn on Applicant’s expressed concerns about its 
accuracy. Applicant testified, as reflected in a transcript (Tr.) received on April 5, 2017. 
 
I held the record open until April 28, 2017, for Applicant to submit additional documentation. 
No further exhibits were submitted by the deadline. Accordingly, the record closed on April 28, 2017. 
 
While this case was pending a decision, the Director of National Intelligence (DNI) issued 
Security Executive Agent Directive 4 establishing the National Security Adjudicative Guidelines (AG) 
applicable to all covered individuals who require national security eligibility or eligibility to hold a 
sensitive position. The AG supersede the adjudicative guidelines implemented in September 2006 
and are effective for any adjudication made on or after June 8, 2017. Accordingly, I have adjudicated 
Applicant’s security clearance eligibility under the new AG.1 
 
Summary of Pleadings 
 
 The SOR alleges under Guideline F that, as of August 2016, Applicant had not paid a federal 
tax lien for $22,166 from 2010 (SOR ¶ 1.a), deficiency balances of $3,852 (SOR ¶ 1.b) and $3,301 
(SOR ¶ 1.d) on loans for vehicles that had been repossessed, and a $536 collection debt (SOR ¶ 
1.c). When he answered the SOR, Applicant stated that he had a payment arrangement or 
agreement for his federal taxes, had a payment arrangement in process for the car loan debt in SOR 
¶ 1.b, had paid in full the collection debt in SOR ¶ 1.c, and had settled the car loan debt in SOR ¶ 
1.d. 
 
Findings of Fact 
 
 After considering the pleadings, exhibits, and transcript, I make the following findings of fact. 
Applicant is a 71-year-old senior electronic engineer, who has worked for his defense 
contractor employer for 33 years. He holds a DOD secret clearance, which was last renewed in 
March 2006. Applicant and his spouse have been married for 45 years, and they have a grown son 
and daughter. Another child, the elder of their two sons, died in 1995. (GE 1; Tr. 30-31.) They 
purchased their home in September 1989, obtaining a joint mortgage loan for $65,000. Applicant 
obtained a second mortgage for $65,000 in his name only.  In January 2007, they paid off both 
mortgages and obtained a new mortgage loan for $140,250. In August 2007, Applicant obtained a 
home-equity loan for $51,140. (GE 3.) 
 
Applicant and his spouse’s three children attended parochial schools. Their oldest son 
attended private high school and then died at age 23 just before he was to graduate from college. 
Their daughter attended the same private high school her freshman year before transferring to 
public high school. Their younger son attended the same public high school. All three children went 
on to college. Applicant earned $45,000 to $50,000 at the time. His youngest son obtained his 
undergraduate degree in the early 2000s and his master’s degree in 2005 or 2006. Applicant and 
his spouse decided to make their children’s educations their priority over their comfort and 
                                                          
1 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in this 
case. 
3 
 
retirement. Applicant “pretty much drained” his retirement account at work for their tuitions and other 
college costs. He paid for 85% of his daughter’s education at a private college. (Tr. 33-38.) For tax 
years 2005 and 2006, Applicant had insufficient income withheld for taxes so that he could pay for 
college expenses, and he could not afford to pay the taxes owed when they came due. (Tr. 39-40.) 
 
IRS account transcripts reveal that Applicant filed his federal income tax returns late for 
several years. His return for 2005 was filed on October 18, 2010. He filed as head of household with 
adjusted gross income of $76,158. As of October 2016, he owed federal income taxes of $2,465 for 
2005 with no record of payments applied to his debt for tax year 2005. (AE A.) Applicant filed his 
return so late because of anxiety. He had been withdrawing retirement funds and could not pay the 
taxes that he owed. (Tr. 57-58.) 
 
In November 2007, the IRS inquired about his failure to timely file his federal income tax 
return for 2006. IRS records reflect that his return was received on July 29, 2008, but also that the 
IRS filed a substitute return on September 1, 2008. Applicant filed an amended return in June 2009, 
reporting adjusted gross income of $118,450. In late May 2010, the first of five installment 
agreements was established.2 Applicant made only two payments, of $220 in late August 2010 and 
$262 in late September 2010. In December 2010, the IRS placed a lien for $22,166 (SOR ¶ 1.a). 
(GE 3; AE A.) Under a new installment agreement, he made payments totaling $7,648 between 
December 21, 2010, and May 9, 2012. Applicant, who had not been consistent in his tax payments, 
responded to an advertisement for tax relief. He retained the services of a new tax relief company 
and was told to stop paying pending a new agreement. (Tr. 76.) In October 2012, the IRS levied his 
wages for $959. Under a new installment agreement, Applicant made monthly payments of $297 
from January 2013 through July 2013. He stopped paying and his account was considered no longer 
in installment agreement status while he retained the services of yet another entity to represent him 
before the IRS. In December 2013, the IRS levied his wages for $1,722. Under a new installment 
agreement established on December 18, 2013, Applicant made an initial payment of $195 in 
February 2014 following by $300 monthly payments for two years. On April 29, 2016, the IRS 
removed the tax lien. In June 2016, Applicant entered into a new installment agreement with the IRS 
under which he paid $325 in July 2016 and in August 2016. His payments in May and June 2016 
were applied to his federal tax liability for 2009. With the IRS’ application of Applicant’s tax refunds 
for tax years 2007 ($434), 2014 ($2,702), and 2015 ($2,471) to his debt for tax year 2006 and 
Applicant’s payments, his income tax debt for 2006 had been reduced to $1,803 as of October 
2016. (AEs A, C.) Applicant testified that he has continued to make $300-$340 monthly payments to 
the IRS under his present installment agreement. (Tr.  60, 64-65.)  
 
Applicant filed his federal income tax return for 2007 on May 9, 2008, reporting adjusted 
gross income of $86,910. He had an extension of time to file for 2007. (Tr. 61.) His refund for that 
year was applied to his tax debt for 2006. His return for tax year 2008 was filed on June 4, 2009, and 
the IRS assessed a penalty for late payment. Applicant paid $822 in August 2009 to satisfy his tax 
liability on adjusted gross income of $99,417 for 2008. (AE A.) Applicant attributes his late tax filing 
to procrastination. (Tr. 62.) 
 
Applicant did not file his federal income tax return for tax year 2009 until October 2010. He 
reported adjusted gross income of $96,337. He was assessed penalties for late filing and late 
payment of tax. In April 2016, $834 of his income tax refund for 2015 was taken and applied to his 
                                                          
2 Applicant explained that he made so many installment agreements because he responded to a television 
advertisement about tax debt relief, and after he paid $1,500 to $2,000, was told that the person no longer 
worked there. He “got burned” by three tax relief companies and for over $5,000 total before he contacted the 
IRS himself and arranged for monthly payments. He thought that the tax relief company would negotiate a 
settlement with the IRS to lower his tax liability. (Tr. 72-75.) 
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debt for tax year 2009. On May 2, 2016, the IRS notified Applicant that he owed $1,583 for tax year 
2009. He made payments of $300 each in May 2016 and June 2016 to lower his tax liability to $997 
as of October 2016. (AEs A, C.) 
 
Applicant filed timely federal income tax returns for tax years 2010, 2011, and 2012. He 
submitted a payment of $1,958 with his return on adjusted gross income of $97,328 and has no 
outstanding tax liability for tax year 2010. He was assessed penalties for late payment of taxes for 
2011 on adjusted gross income of $93,672 and for 2012 on adjusted gross income of $89,866. As of 
October 2016, he owed the IRS $1,968 for 2011 and $1,138 for 2012. (AE A; Tr. 63.) There is no 
evidence that Applicant filed late returns for tax years 2013 through 2015. (Tr. 63.) As of his hearing 
in March 2017, Applicant’s federal income tax return for 2016 was not yet due. He anticipated that 
he had overpaid his income taxes and that his refund would be taken by the IRS and applied to his 
income tax delinquency which he estimated was around $7,000.3 (Tr. 40, 78.) 
To renew his security clearance eligibility, Applicant completed and certified to the accuracy 
of a Questionnaire for National Security Positions (SF 86) on October 20, 2015. In response to 
financial record inquiries concerning delinquency involving routine accounts, Applicant disclosed 
that he was over 120 days past due for $1,260 (SOR 1.b) and $1,580 (SOR ¶ 1.d) on two 
“predatory” car loans. (GE 1.) Applicant elaborated at his hearing, and his credit report shows (GE 
3), that he bought two vehicles from the same dealer in December 2010, which were financed by the 
lender in SOR ¶ 1.b through loans of $11,811 and $10,741. Applicant purchased the vehicle in SOR 
1.d without a valid title with the understanding that the title would be acquired later. He explained 
that the dealer somehow managed to get the vehicle temporarily registered without a title. His loan 
for that vehicle was subsequently acquired by the creditor in SOR ¶ 1.d. When he did not have the 
title needed to register the vehicle in 2012, he stopped paying on both auto loans, even though he 
had no title problem with the other car. Both vehicles were repossessed. (Tr. 42-46, 50-53.) He 
indicated on his SF 86 that he was determined to make repayment arrangements on the loans. 
Applicant listed no other past-due debts. He responded negatively to an inquiry into whether he had 
failed to file or pay federal, state, or other taxes when required by law or ordinance in the last seven 
years. (GE 1.) 
 
As of November 10, 2015, Applicant reportedly owed respective balances of $3,852 and 
$3,301 on the automobile loans after repossession of the vehicles. There had been no activity on 
either loan since August 2012. An insurance debt of $536 (SOR ¶ 1.c) was in collection since March 
2014. The federal tax lien from December 2010 was still on his credit record. Applicant’s and his 
spouse’s mortgage loan was current with a balance of $115,190, although the loan had been past-
due 30 days 35 times, including in August 2015. Applicant’s home-equity line of credit had not been 
delinquent since January 2014, when it was 60 days past due. (GE 3.) 
 
On April 22, 2016, Applicant was billed $5,056 by the creditor in SOR ¶ 1.b for his defaulted 
loan balance plus interest and late charges. (AE E.) As of March 2017, Applicant had yet to arrange 
for repayment. Applicant testified that the bank was dissolved, but that he contacted the local office 
and was told that he can make payments but only by mail. He wanted to make his payments in 
person. If the bank takes him to court on the debt, he will settle it. As of March 2017, he did not have 
$5,000 on hand to settle the debt. He had about $1,800 in checking deposits and nothing in savings. 
(Tr. 53-55.) 
 
                                                          
3 Applicant testified that he is just beginning to sleep a little because his IRS debt is now a manageable 
$7,000. (Tr. 40, 78.) Available IRS account transcripts show that Applicant owed $2,465 for 2005, $1,803 for 
2006, $997 for 2009, $1,968 for 2011, and $1,138 for 2012 as of October 10, 2016. (AE A.) Assuming he 
continued to pay $300 a month and with interest continuing to accrue, he may well owe approximately $7,000 
as of late March 2017. 
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On April 29, 2016, the collection entity for the loan deficiency in SOR ¶ 1.d agreed to settle 
Applicant’s $3,226 past-due balance for a lump-sum payment of $900 due that day. Applicant paid 
$900 by personal check. (AE D; Tr. 46.) Applicant testified that the insurance debt in SOR ¶ 1.c was 
paid in full (Tr. 47-48), although he provided no proof of payment. 
 
Applicant’s take-home pay is approximately $1,600 every two weeks on annual income of 
approximately $92,000. His monthly mortgage payment is between $1,100 and $1,200. He has 
rented a vehicle on a weekly basis at an average cost of $500 a month since 2012 or 2013. (Tr. 71.) 
He pays $40-$50 for his Internet service. He estimated that he has about $600 to $700 in 
discretionary income each month. (Tr. 38, 66-69.) Applicant’s spouse is retired. She has a pension, 
but she maintains her own financial accounts. (Tr. 66, 70-71.) 
 
Policies 
 
The U.S. Supreme Court has recognized the substantial discretion the Executive Branch has 
in regulating access to information pertaining to national security,  emphasizing that “no one has a 
‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). When 
evaluating an applicant’s suitability for a security clearance, the administrative judge must consider 
the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the 
adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are 
required to be considered 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 the adjudicative 
process. The administrative judge’s overall adjudicative goal is a fair, impartial, and commonsense 
decision. According to AG ¶ 2(a), the entire process is a conscientious scrutiny 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 national security eligibility 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. Under 
Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged 
in the SOR. Under Directive ¶ E3.1.15, the 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 applicant has the ultimate burden of persuasion to obtain a favorable 
security decision. 
 
A person who seeks access to classified information enters 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 grants access to classified information. Decisions include, by 
necessity, consideration of the possible risk that the applicant may deliberately or inadvertently fail to 
safeguard classified information. Such decisions entail a certain degree of legally permissible 
extrapolation about potential, rather than actual, risk of compromise of classified information. 
Section 7 of EO 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.” See also EO 12968, 
Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information). 
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Analysis 
 
Guideline F: Financial Considerations 
 
 The security concerns about financial considerations are articulated in AG ¶ 18: 
 
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 overextended is at 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. 
 
 An applicant is not required to be debt free, but is required to manage his finances in a way 
as to exhibit sound judgment and responsibility. Applicant exhibited poor financial judgment in 
several aspects. In approximately August 2012, he stopped paying on car loans for two vehicles that 
he purchased from the same dealer. His rationale is that one of the vehicles was sold without a valid 
title, and although he was able to register the vehicle initially, he could not re-register it without the 
title. He admitted that his frustrations over that vehicle led him to stop paying on his other loan, even 
though there was no problem with the title for that vehicle. As of October 2015, he owed $3,852 and 
$3,301 on the defaulted automobile loans and a $536 insurance debt in collection since March 
2014. Disqualifying conditions AG ¶ 19(a), “inability to satisfy debts,” and AG ¶ 19(c), “a history of 
not meeting financial obligations,” apply. AG ¶ 19(b), “unwillingness to satisfy debts regardless of the 
ability to do so,” is implicated in that Applicant had no reasonable justification for defaulting on the 
car loan for the vehicle with a valid title. 
 
 Available IRS transcripts show that Applicant filed late federal income tax returns for tax 
years 2005 and 2006 because he did not have the funds to pay taxes owed. He filed late returns for 
2008 and 2009 because of procrastination. The IRS filed a tax lien against him for $22,166 in 
December 2010, which included penalties assessed for late filing and late payment for 2006. The 
SOR alleges only the tax delinquency as of 2010 and not the late tax filings or his additional tax 
delinquencies.4 Even so, AG ¶ 19(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,” is 
clearly established. 
 
 Applicant has the burden of presenting evidence of explanation, extenuation, or mitigation to 
overcome the security concerns raised by his record of delinquency. Under the AG effective for any 
adjudication on or after June 8, 2017, a record of consumer credit and tax delinquency may be 
mitigated under one or more of the following conditions under ¶ 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; 
                                                          
4 It is unclear whether Applicant filed timely state income tax returns. No evidence was presented in that 
regard. 
7 
 
 
(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, 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 arrangements with the appropriate tax authority to file or 
pay the amount owed and is in compliance with those arrangements. 
 
 The federal tax lien was filed to recover his tax delinquency for tax year 2006. The consumer 
vehicle loan defaults are from 2012. These debts were not incurred recently. However, it is difficult 
to conclude that the debts do not cast doubt on Applicant’s current reliability, trustworthiness, or 
good judgment because of the persistent nature of Applicant’s federal tax problems and his failure to 
take reasonable steps to address the defaulted loan in SOR ¶ 1.b. Applicant failed to file timely 
federal income tax returns for several tax years, including 2008 and 2009, and to pay federal income 
taxes owed when they were due for tax years 2005, 2006, 2008, 2009, 2011, and 2012. As of 
October 2016, Applicant owed federal tax debt totaling approximately $8,371. Additionally, as 
recently as April 2016, the creditor in SOR ¶ 1.b was pursuing Applicant for a car loan deficiency 
balance, which had accrued to $5,056 because of interest and late charges. AG ¶ 20(a) does not 
mitigate the security concerns raised by ongoing delinquency. 
 
 AG ¶ 20(b) does not apply because the tax and consumer credit delinquencies were the 
result of Applicant’s poor financial decisions. He claimed exemptions from income withholding in 
2005 and 2006 so that he could take home more of his pay. He chose to take premature 
withdrawals from his retirement to pay for college for his children. While college is not a frivolous 
expense, his decision had tax implications. His tax debt includes tax penalties for late filing of some 
returns. AG ¶ 20(b) does not mitigate his procrastination in addressing his federal tax issues or the 
very poor judgment he exhibited by then failing to comply with established installment agreements 
by changing tax relief firms in response to television advertisements. Concerning the loans in the 
SOR, Applicant purchased the car in SOR ¶ 1.d, apparently knowing that the dealer did not have a 
title. He defaulted on the other car loan because he was frustrated over problems with the title for 
the other car. 
 
 AG ¶ 20(c) and AG ¶ 20(d) have some applicability because Applicant settled the car loan 
debt in SOR ¶ 1.d for $900 in late April 2016. He indicated in response to the SOR that he paid the 
$536 insurance debt in full. He presented proof of payments toward his taxes and candidly admitted 
that he had made no payments on the car loan in SOR ¶ 1.b, and his credibility on those issues 
leads me to accept his claim of satisfaction of the insurance debt without corroborating 
documentation. Neither AG ¶ 20(c) nor ¶ 20(d) mitigate his lack of progress toward resolving the car 
loan delinquency in SOR ¶ 1.b. Applicant testified discrepantly that the bank was dissolved, but that 
he was able to reach the office at which he apparently obtained the loan (i.e., the address he 
provided is consistent with that for the bank on his credit report). He was told that he could make 
payments, but not in person. While I can appreciate that Applicant would want assurances of 
8 
 
payments being credited to his loan, Applicant is not in a position to dictate how he should make the 
payments. The April 2016 loan billing statement from the bank provided a mailing address for any 
payments. Furthermore, Applicant has not had any of the credit counseling required for full 
mitigation under AG ¶ 20(d), even though his handling of his retirement assets and the car loans 
would suggest he could benefit from some financial counseling. 
 
 Concerning Applicant’s tax issues, noncompliance with tax filing deadlines and tax payments 
is irresponsible behavior that raises doubts about whether he can be counted on to fulfill the 
obligations of his security clearance. That being said, he caught up with his delinquent federal 
returns on October 18, 2010, when he filed his return for 2005. He filed his income tax returns for 
2006 through 2009 before his 2005 return. He has yet to fully resolve his federal income tax 
payment issues. IRS transcripts show that he has paid more than $18,000 toward his past-due taxes 
since August 2010. With interception and application of tax refunds and payments, his tax debt was 
a more manageable $8,731 as of October 2016. Applicant testified in March 2017 that he has 
continued to pay the IRS $300 to $325 a month. He had an opportunity to provide proof of those 
payments and did not do so. He has not always been in compliance with his installment agreements. 
Applicant’s retention and cancellation of tax resolution services in the hope of a more advantageous 
settlement of his federal tax issues led him to miss some tax payments in the fall of 2010, from June 
2012 through December 2012, and from August 2013 through December 2013, and the IRS 
cancelled established installment agreements. He claims he “got burned” by three separate tax 
resolution companies to which he paid $5,000 that could have gone directly to his tax debts. Yet, he 
has a track record of consistent payments to the IRS since February 2014, most of which were 
applied to his debt for tax year 2006. He made $300 payments in May and June 2016, which were 
applied to his tax delinquency for 2009. The IRS removed the tax lien in April 2016, presumably 
because of his payments. 
 
 The security clearance adjudication is not aimed at collecting an applicant’s personal debts. 
Rather, it involves an evaluation of an applicant’s judgment, reliability, and trustworthiness in light of 
the security guidelines in the Directive. See ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010). In 
evaluating Guideline F cases, the Appeal Board has established that an applicant is not required to 
pay off every debt in the SOR: 
 
The Board has previously noted that the concept of a meaningful track record 
necessarily includes evidence of actual debt reduction through payment of debts. 
However, an applicant is not require, as a matter of law, to establish that he has paid 
off each and every debt listed in the SOR. All that is required is that an applicant 
demonstrate that he has established a plan to resolve his financial problems and 
taken significant actions to implement that plan. The Judge can reasonably consider 
the entirety of an applicant’s financial situation and evaluating the extent to which 
that applicant’s plan for the reduction of his outstanding indebtedness is credible and 
realistic.  
 
See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations and quotation 
marks omitted). Applicant has made enough progress toward resolving his federal tax issues to 
inspire confidence that he will continue to make his payments to the IRS, provided he has the 
income to do so. Given his insistence on wanting to pay the car loan debt in SOR ¶ 1.b in person, 
when he has been told he cannot do so, I do not have similar confidence that he will make payments 
toward that debt. Applicant’s annual salary is about $92,000 a year and yet he has only $1,800 in 
checking deposits and nothing in savings, perhaps because he has been paying approximately 
$500 a month to rent a car since 2012 or 2013. He also has a history of late payments on his home 
9 
 
mortgage loan, including in September 2015, which is additional evidence of financial 
mismanagement. The financial considerations security concerns are not fully mitigated. 
 
Whole-Person Concept 
 
In the whole-person evaluation, the administrative judge must consider the totality of an 
applicant’s conduct and all relevant circumstances in light of the nine adjudicative process factors in 
AG ¶ 2(d).5 Some of the factors in AG ¶ 2(d) were addressed under Guideline F, but some warrant 
additional comment. 
 
 Applicant and his spouse prioritized their children’s educations over their own comfort and 
future financial security. While laudable from a parental standpoint, his decisions to drain his 
retirement fund and claim exemptions from tax withholding had tax consequences that have affected 
his personal finances and apparently also caused him some sleepless nights over the past ten 
years. He exhibited poor judgment by buying a car without a title and later defaulting on a separate 
car loan simply because he was upset with the dealer. 
 
 Applicant has worked for the same defense contractor since 1984. While he presented no 
character reference information, it may reasonably be inferred from his longevity at the company that 
his work has met his employer’s expectations. His outstanding delinquency totals less than $15,000, 
which is not an insurmountable debt burden on his salary of $92,000 annually. At the same time, his 
default of a car loan because he had problems with another vehicle’s title and his lack of any 
progress toward that debt is ongoing evidence of financial irresponsibility that is not mitigated by a 
stated intention to settle if he is brought to court. He has had some difficulties paying his debts on 
time, despite income that should be sufficient to cover his expenses. Applicant’s history of tax 
delinquency includes $1,968 for tax year 2011, when his adjusted gross income was $93,672, and 
$1,138 for tax year 2012, when his adjusted gross income was $89,866. As of October 2015, his 
mortgage loan payments had been 30 days late some 35 times. It is well settled that once a concern 
arises regarding an applicant’s security clearance eligibility, there is a strong presumption against 
the grant or renewal of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 
1990). For the reasons noted above, I conclude that it is not clearly consistent with the national 
interest to grant Applicant security clearance eligibility. 
 
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 
 
                                                          
5 The factors under AG ¶ 2(d) are as follows: 
 
(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. 
 
10 
 
Subparagraph 1.a:   For Applicant 
Subparagraph 1.b:   Against Applicant 
  Subparagraph 1.c:   For Applicant 
  Subparagraph 1.d:   For Applicant 
 
Conclusion 
 
In light of all of the circumstances, it is not clearly consistent with the national 
interest to continue Applicant’s eligibility for a security clearance. Eligibility for access to 
classified information is denied. 
 
 
_____________________ 
Elizabeth M. Matchinski 
Administrative Judge