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    DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of:  ) 
 ) 
 ) ISCR Case No. 16-00551 
 ) 
Applicant for Security Clearance  ) 
Appearances 
For Government: Tovah Minster, Esq., Department Counsel 
For Applicant: Pro se 
______________ 
Decision 
______________ 
MATCHINSKI, Elizabeth M., Administrative Judge: 
Applicant failed to timely file his federal income tax returns for tax years 2012 
through 2014 due to procrastination. He claims without any corroboration that his 
delinquent tax returns have been filed. There is insufficient assurance that he will comply 
with his tax filing and tax payment obligations in the future. Clearance is denied. 
Statement of the Case 
On October 15, 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. 
REDACTED
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On November 9, 2016, Applicant answered the SOR allegations and requested a 
decision on the written record by an administrative judge from the Defense Office of 
Hearings and Appeals (DOHA). On November 29, 2016, the Government submitted a File 
of Relevant Material (FORM), consisting of four exhibits (Items 1-4). DOHA forwarded a 
copy of the FORM to Applicant on November 30, 2016, and instructed him to respond 
within 30 days of receipt. Applicant received the FORM on December 6, 2016. He did not 
file a response by the January 5, 2017 deadline. On October 1, 2017, I was assigned the 
case to determine whether it is clearly consistent with national security to grant or continue 
a security clearance for Applicant. 
 
While this case was pending a decision, Security Executive Agent Directive 4 was 
issued establishing National Security Adjudicative Guidelines (AG) applicable to all covered 
individuals who require initial or continued eligibility for access to classified information 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 
 
Evidentiary Ruling 
 
 Department Counsel submitted as Item 3 a summary of a subject interview of 
Applicant conducted on November 13, 2015. The summary was part of the DOD Report of 
Investigation (ROI) in Applicant’s case. Under ¶ E3.1.20 of the Directive, a DOD personnel 
background report of investigation may be received in evidence and considered with an 
authenticating witness, provided it is otherwise admissible under the Federal Rules of 
Evidence. The interview summary did not bear the authentication required for admissibility 
under ¶ E3.1.20. 
 
 In ISCR Case No. 15-01807 decided on April 19, 2017, the Appeal Board held that it 
was not error for an administrative judge to admit and consider a summary of personal 
subject interview in the absence of any objection to it or any indication that it contained 
inaccurate information. The applicant in that case had objected on appeal to the accuracy 
of some of the information in a FORM, but had not objected to the interview summary or 
indicated that it was inaccurate in any aspects when she responded to the FORM. 
 
 Unlike the applicant in ISCR Case No. 15-01807, Applicant did not submit a 
response to the FORM submitted in his case. However, as in ISCR Case No. 15-01807, 
Applicant was provided a copy of the FORM and advised of his opportunity to submit 
objections or material that he wanted the administrative judge to consider. In a footnote, 
the FORM advised Applicant of the following: 
 
IMPORTANT NOTICE TO APPLICANT: The attached summary of your 
Personal Subject Interview (PSI) (Item 3) is being provided to the 
Administrative Judge for consideration as part of the record evidence in this 
                                                 
1 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in this 
case. 
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case. In your response to this File of Relevant Material (FORM), you can 
comment on whether [the] PSI summary accurately reflects the information 
you provided to the authorized OPM investigator(s) and you can make any 
corrections, additions, deletions, and updates necessary to make the 
summary clear and accurate. Alternatively, you can object on the ground that 
the report is unauthenticated by a Government witness. If no objections are 
raised in your response to the FORM, or if you do not respond to the FORM, 
the Administrative Judge may determine that you have waived any objections 
to the admissibility of the summary and may consider the summary as 
evidence in your case. 
 
Concerning whether Applicant understood the meaning of authentication or the legal 
consequences of waiver, Applicant’s pro se status does not confer any due process rights 
or protections beyond those afforded him if he was represented by legal counsel. He was 
advised in ¶ E3.1.4 of the Directive that he may request a hearing. In ¶ E3.1.15, he was 
advised that he is responsible for presenting evidence to rebut, explain, or mitigate facts 
admitted by him or proven by Department Counsel and that he has the ultimate burden of 
persuasion as to obtaining a favorable clearance decision. While the Directive does not 
specifically provide for a waiver of the authentication requirement, Applicant was placed on 
sufficient notice of his opportunity to object to the admissibility of the interview summary, to 
comment on the interview summary, and to make any corrections, deletions, or updates to 
the information in the report. He was advised that if he did not respond, the interview 
summary may be considered as evidence in his case. Applicant chose to rely solely on the 
record presented in the FORM, which included the information reflected in the interview 
summary, however disqualifying, mitigating, or exculpatory the information. I cannot 
presume without any evidence that Applicant failed to understand his due process rights or 
obligations under the Directive or that he did not want the summary of his interview 
considered in his case. Accordingly, I accepted Item 3 in the record, subject to issues of 
relevance and materiality in light of the entire record. 
 
Findings of Fact 
 
 The SOR alleges under Guideline F that, as of October 15, 2016, Applicant had 
failed to file his “federal taxes” for at least tax years 2012 through 2014. When he 
responded to the SOR, Applicant denied the allegation but stated, “The statement was true 
when the original application was made. Since that application was filed all taxes have 
been filed.”  
 
 After considering the FORM, which includes Applicant’s response to the SOR 
allegation as Item 1, I make the following findings of fact. 
 
 Applicant is a 57-year-old college graduate with a bachelor’s degree awarded in May 
1996. Applicant married his current wife in December 2010. He has three adult children 
from his first marriage and four stepchildren. Applicant has worked for his defense 
contractor employer since March 1999. As of September 2015, he held the position of 
senior project engineer. Since March 2010, Applicant has also owned and operated a 
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business that provides sound and recording services in the music industry. Applicant 
served honorably on active duty in the U.S. military from May 1986 to July 1997. He held a 
DOD secret clearance for his military duties. (Items 2-3.) 
 
 On September 29, 2015, Applicant completed and certified to the accuracy of a 
Questionnaire for National Security Positions (SF 86). He responded “Yes” to the following 
tax inquiry: “In the past seven (7) years have you failed to file or pay Federal, state, or other 
taxes when required by law or ordinance?” and disclosed that he had not filed his federal 
tax returns for tax years 2012 and 2014 because of “Procrastination/level of effort.” 
Concerning any actions taken to resolve the issue, Applicant indicated that his income 
withholdings well exceeded his obligation and that he was working with his accountant to 
get his returns filed. Applicant listed that he had been delinquent on a second mortgage on 
his previous home and on the first mortgage on his current home, but both issues had 
been resolved. Under additional comments, Applicant attributed his delinquent mortgages 
to several factors: leasing out his previous residence (townhouse) after he moved to his 
current home in 2007, tenants that failed to pay rent, costs associated with a short sale,2  
unplanned breaks in his spouse’s employment, and having to take in his unemployed 
brother and nephew. He indicated that his finances were fragile, but improving in the last 
few months. His spouse had become employed at a much better income. His stepson was 
gaining some financial independence, and his nephew had moved out. His entertainment 
business was generating enough revenue to offset operating costs. (Item 2.) 
 
 On November 23, 2015, Applicant was interviewed by an authorized investigator for 
the Office of Personnel Management (OPM). Regarding his unfiled federal returns, 
Applicant acknowledged that he had not filed his federal income tax returns for tax years 
2012, 2013, and 2014. He explained that he never got around to filing them. Because he 
would have received refunds, he was not in any hurry to file them. He indicated that he 
would file his delinquent returns with his 2015 federal tax return if he is able to get all his 
paperwork together. He explained that he had digital files for his taxes for those years but 
that his computer had crashed. Applicant did not believe that his tax issues could be a 
source of compromise for him. (Item 3.) 
 
 A check of Applicant’s credit record on October 17, 2015 revealed that he had been 
seriously past due on his mortgage as of August 2011 and it was in foreclosure status at 
that time. However, he had been making timely monthly payments for at least two years. 
He was making timely payments on an $8,495 car loan obtained in August 2013. He had 
recently obtained an unsecured loan of $8,346 in August 2015. He owed two small medical 
debts from 2010 in collection for $116 and $10, but no other delinquencies. (Item 4.) 
 
 Applicant indicated on November 9, 2016, that he had not filed his federal income 
tax returns for tax years 2012 through 2014 as of his SF 86, but he had since filed the 
returns. (Item 1.) With his receipt of the FORM on December 6, 2016, Applicant was on 
notice that the DOD had concerns about the absence of documentation showing that he 
had filed his delinquent tax returns. Nothing was received from Applicant. Without evidence 
                                                 
2 His wages had been garnished to pay the delinquency on the second mortgage for his previous residence. 
 
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of his returns, IRS transcripts, or other documentation of his taxable income and taxes 
withheld, it is unclear whether he owes any tax liability for tax years 2012 through 2015. 
 
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 set forth 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. 
 
 The Government met its burden of establishing a prima facie case for 
disqualification because of Applicant’s admitted failure to timely comply with his federal 
income tax filing obligation for tax years 2012 through 2014. Disqualifying condition 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.”  
 
 Applicant has the burden of presenting evidence of explanation, extenuation, or 
mitigation to overcome the security concerns raised by his failure to comply with his income 
tax filing obligation. Under the AG effective for any adjudication on or after June 8, 2017, a 
record of tax filing 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; 
 
(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; and 
 
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(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. 
 
 Mitigating condition AG ¶ 20(a) cannot reasonably apply. He had not filed his federal 
income tax returns for tax years 2012 through 2014 as of his September 2015 SF 86. His 
noncompliance for the three tax years immediately preceding his SF 86 reflects a 
continuing course of conduct that raises considerable security concerns about his ability or 
willingness to comply with laws, rules, and regulations. 
 
 Concerning AG ¶ 20(b), on his SF 86 Applicant listed procrastination and “level of 
effort” as his reasons for not filing timely returns for those tax years. During his November 
2015 subject interview, Applicant indicated that he would have received refunds for those 
tax years and so he was not in any hurry to file his returns. Applicant apparently had some 
tenant and family issues that adversely affected his finances between 2011 and 2013, but 
they would not excuse him from his legal obligation to file a timely tax return. Indeed, if he 
was expecting tax refunds as he claims, it would have been to his financial benefit to have 
filed his returns on time. There is no evidence of an unexpected circumstance outside of 
his control that could credibly mitigate his failure to file his federal income tax returns for 
three consecutive tax years. 
 
Applicant candidly admitted that he had yet to file his income tax returns for 2012 
through 2014 as of his November 2015 subject interview. Even if I accept his 
uncorroborated assertion that his delinquent federal income tax returns for tax years 2012 
through 2014 had been filed sometime over that next year, it is difficult to conclude that the 
problem is being resolved or is under control under AG ¶ 20c) or that he has complied with 
any tax arrangements under AG ¶ 20(g). The extent of Applicant’s outstanding federal tax 
liability, including any penalties and interest for late filing, is unknown. Furthermore, 
although not alleged, it is unclear whether he filed his state income tax returns for tax years 
2012 through 2014 or whether he timely filed federal and state tax returns for tax year 
2015. Applicant lives in a state that has an income tax filing and payment obligation.3  He 
has his own business that could well generate income. More importantly going forward, 
Applicant has not demonstrated that he understands his obligation to file his tax returns in 
a timely manner in the future whether or not his income tax withholdings exceed his tax 
liability. 
 
Even where tax problems have been corrected and an applicant is motivated to 
prevent such problems in the future, the administrative judge is not precluded from 
considering an applicant’s trustworthiness in light of prior behavior evidencing 
irresponsibility. See e.g., ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 2015.) The Appeal 
Board has long held that an applicant who fails to file timely tax returns does not 
demonstrate the high degree of good judgment and reliability required of persons granted 
access to classified information. See, e.g., ISCR Case No. 14-00221 at 4 (App. Bd. Jun. 
29, 2016), citing ISCR Case No. 12-05053 at 4 (App. Bd. Oct. 30, 2014). With Applicant 
having provided no documentation establishing the filing of his delinquent income tax 
                                                 
3 See Title 58.1 of the Code of Virginia. 
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returns, there is insufficient assurance that Applicant’s tax issues are being resolved and 
will not recur in the future. He failed to establish that the financial considerations security 
concerns are mitigated. 
 
Whole-Person Concept 
 
In assessing the whole person, 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).4 The analysis under Guideline F is incorporated in my whole-
person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but 
some warrant additional comment. 
 
 The security clearance adjudication 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). Having chosen to rely on the 
written record, it was incumbent on Applicant to provide sufficient information to 
supplement the record with relevant and material facts regarding his circumstances. He 
submitted no documentation showing that he has filed his tax returns for the three years as 
he asserted. Not enough is known about Applicant’s current tax situation for me to 
conclude that he is likely to comply with his tax filing and tax payment issues in the future. 
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.) Based on the 
evidence before me, I am unable to conclude that it is clearly consistent with the national 
interest to grant or continue security clearance eligibility for Applicant. 
 
Formal Finding 
 
Formal finding for or against Applicant on the allegation set forth in the SOR, as 
required by section E3.1.25 of Enclosure 3 of the Directive, is: 
 
Paragraph 1, Financial Considerations:  Against Applicant 
 
 Subparagraph 1.a:    Against Applicant 
   
                                                 
4 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.  
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Conclusion 
 
In light of all of the circumstances, it is not clearly consistent with the national 
interest to grant or continue Applicant’s eligibility for a security clearance. Eligibility for 
access to classified information is denied. 
 
 
_____________________ 
Elizabeth M. Matchinski 
Administrative Judge