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                   DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
 
 
 
 
In the matter of:  ) 
 ) 
    )   ISCR Case No. 17-01471 
   ) 
Applicant for Security Clearance  ) 
 
 
Appearances 
 
For Government: Robert B. Blazewick, Esq., Department Counsel 
For Applicant: Francis J. Flanagan, Esq. 
 
 
______________ 
 
Decision 
______________ 
 
 
MATCHINSKI, Elizabeth M., Administrative Judge: 
 
 Applicant did not timely file her federal or state income tax returns for tax years 2013 
through 2016. She filed her delinquent tax returns in October 2017 and has repaid all past-
due income tax liabilities, but her recent and recurrent failure to comply with her tax-filing 
obligations casts doubt on her judgment and reliability and whether she can be counted on 
to comply with tax-filing deadlines in the future. Clearance is denied. 
 
Statement of the Case 
 
 On October 16, 2017, the Department of Defense Consolidated Adjudications 
Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing security 
concerns under Guideline F, financial considerations, and Guideline E, personal conduct. 
The SOR explained why the DOD CAF was unable to find it clearly consistent with the 
national interest to grant or continue security clearance eligibility for her. 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 National Security Adjudicative Guidelines for Determining Eligibility for 
 
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Access to Classified Information or Eligibility to Hold a Sensitive Position (AG) effective 
within the DOD on June 8, 2017. 
 
Applicant responded to the SOR through her Counsel on November 2, 2017, and 
requested a hearing before an administrative judge from the Defense Office of Hearings 
and Appeals (DOHA). On January 9, 2018, the case was assigned to me to conduct a 
hearing to determine whether it is clearly consistent with the national interest to grant or 
continue a security clearance for Applicant. On January 11, 2018, I scheduled a hearing for 
February 6, 2018. 
 
At the hearing, three Government exhibits (GEs 1-3) were admitted in evidence. A 
December 4, 2017 letter forwarding discovery of the GEs to Applicant’s counsel was 
marked as a hearing exhibit (HE 1) but not admitted as an evidentiary exhibit. Applicant 
and three witnesses testified, as reflected in a transcript (Tr.) received on February 13, 
2018. 
 
I held the record open until February 23, 2018, for post-hearing submissions from 
Applicant. On February 26, 2018, I received a letter authored by a certified public 
accountant (CPA), which was marked and admitted without objection as Applicant exhibit 
(AE) A. 
 
Summary of SOR Allegations 
 
 The SOR alleges under Guideline F that, as of October 16, 2017, Applicant had not 
yet filed her federal and state income tax returns for tax years 2010 through 2016 (SOR ¶¶ 
1.a-1.n). Additionally, Applicant is alleged to owe delinquent federal income taxes of $4,208 
for 2010 (SOR ¶ 1.a), $2,581 for 2011 (SOR ¶ 1.c), and $20,898 for 2012 (SOR ¶ 1.e) and 
state income taxes of $833 for 2010 (SOR ¶ 1.b), $3,671 for 2012 (SOR ¶ 1.f), $555 for 
2013 (SOR ¶ 1.h), $2,867 for 2014 (SOR ¶ 1.j), and $547 for 2015 (SOR ¶ 1.l). Under 
Guideline E, Applicant is alleged to have deliberately falsified her April 2016 security 
clearance application (SF 86) by disclosing her noncompliance with her federal and state 
income tax filing obligations only for tax years 2013 and 2014 (SOR ¶ 2.a). When Applicant 
answered the SOR allegations, she admitted that she did not timely file her federal and 
state income tax returns for the tax years alleged, but she denied that they were still 
unfiled. Concerning the tax debts, she indicated that her federal income tax debts for 2010, 
2011, and 2012 were being repaid under an agreed upon payment plan, while all of her 
state income tax debts were satisfied. Applicant denied that she intended to falsify her SF 
86 and indicated that her answer to the tax inquiry was “inadvertently mistaken.” (Answer.) 
 
Findings of Fact 
 
 After considering the pleadings, exhibits, and transcript, I make the following 
findings of fact. 
 
Applicant is a 58-year-old senior manager in subcontracts, who has worked for her 
defense-contractor employer since October 2006. She was initially cleared for classified 
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access in 1984, and she held a security clearance during her previous employment with a 
defense contractor from April 2002 to October 2006. She currently holds a Secret 
clearance for her duties, but held a Top Secret clearance in the past. Applicant has a 
bachelor’s degree awarded in 1991. She has been in a common-law marriage since 
approximately October 2010. She was previously married from December 1979 to August 
1995 and has a 30-year-old son from that marriage. Applicant’s ex-husband was not 
involved in their son’s life after their divorce. (GEs 1-2; Tr. 15-17.) 
 
Applicant filed her income tax returns as head of household after her divorce. For 
tax years 2010 through 2012, Applicant and her common-law spouse filed tax returns as 
married, filing separately, which apparently resulted in a significant income tax 
underpayment for Applicant. She entered into an installment arrangement with the IRS to 
pay taxes owed. The government alleged in the SOR that Applicant owed federal taxes of 
$4,208 for 2010, $2,581 for 2011, and $20,898 for 2012, although no documentation was 
presented of that tax liability or of the installment agreement. In 2014 or 2015, Applicant 
adjusted her deduction to “zero” for income tax withholding purposes. (Tr. 31-33.) While 
she continued to have taxes withheld from her income, she did not file her federal or state 
income tax returns for tax years 2013, 2014, and 2015. (GE 1.) Applicant collected the 
information needed to file her tax returns but made no effort to prepare her income tax 
returns, and her spouse was no help in that regard. (Tr. 34, 37.) She received some 
notices from the IRS about missing returns for 2013 and 2014 and does not now recall 
whether she ever responded, although they served to remind her that she needed to file 
her tax returns. She does not remember receiving any notice from the IRS for tax year 
2015 or any correspondence from the state for any of the tax years. (Tr. 37-38.) 
 
On April 21, 2016, Applicant completed and certified to the accuracy of a 
Questionnaire for National Security Positions (SF 86). She responded affirmatively to an 
inquiry concerning whether she had failed to file or pay federal, state, or other taxes in the 
last seven years, and stated, “I have not filed my income tax returns on time.” She cited tax 
years 2013 and 2014 specifically with regard to which tax years for which she had not filed, 
and added that she was in the process of compiling the information needed to file the 
returns and that she intended to complete all filings by July 2016.” (GE 1.) Applicant denies 
any intention to deceive the government by failing to specifically disclose that she had not 
filed her tax returns on time for 2015 or that she had owed past-due taxes. She testified 
that she was trying to offer information but did not state it correctly. (Tr. 26-27.) 
  
On January 31, 2017, Applicant was interviewed by an authorized investigator for 
the Office of Personnel Management (OPM). She indicated that she had yet to file her 
income tax returns for tax years 2013, 2014, and 2015 because she had not collected the 
paperwork needed to file them. She expressed an intention to file her tax returns by late 
February 2017, and she expected tax refunds for each year. (GE 2.) 
 
On July 31, 2017, DOHA sent interrogatories to Applicant asking in part about her 
tax filings and tax debts. She was asked to submit account transcripts from the IRS for tax 
years 2010 through 2016.1 Applicant requested an extension of time to respond because of 
                                                 
1 It is unclear whether those account transcripts were ever provided by Applicant. They are not in evidence, 
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her demanding work schedule. Additionally, she sustained a head injury in an accident on 
August 25, 2017, that caused lingering medical issues, and she has been working on 
resolution of a claim from a car accident her son had on September 6, 2017.  When she 
responded to the interrogatories on October 3, 2017, Applicant admitted that she had failed 
to timely file some of her state income tax returns, but she denied owing any state income 
taxes. She did not specify which tax years were involved. She admitted that she owed 
some past-due federal income taxes, and explained in part: 
 
With regard to prior year tax returns, the delay was primarily attributable to 1) 
the belief that in modifying deductions there would be no federal tax owed 
and 2) the need to collect appropriate receipts to ensure that upon 
submission of the returns they were accurate and complete. 
 
Applicant added that she had retained an accountant to prepare her delinquent income tax 
returns and based on her meeting with him, all tax returns should be completed by the end 
of October 2017.2 She indicated that for those years where tax returns had been filed and 
she owed taxes, she was repaying the taxes under an installment agreement. She did not 
anticipate owing any taxes for tax years 2013 through 2016. She stated that she 
understood it was her responsibility to ensure that she meets her obligations. (GE 2.)  
 
 On October 10, 2017, Applicant’s counsel forwarded to DOHA an email from the 
accountant retained to prepare Applicant’s delinquent income tax returns. The accountant 
confirmed that he met with Applicant on October 3, 2017, to begin preparing her tax returns 
for tax years 2013 through 2016. He expressed his belief that he could complete the tax 
returns by the middle of that next week. (GE 3.) 
 
 On October 16, 2017, an SOR was issued to Applicant alleging that she had yet to 
file her federal and state income tax returns for tax years 2010 through 2016 and that she 
owed past-due federal income taxes totaling $27,687 ($4,208 for 2010, $2,581 for 2011, 
and $20,898 for 2012) and past-due state income taxes of $8,473 ($833 for 2010, $3,671 
for 2012, $555 for 2013, $2,867 for 2014, and $547 for 2015). On November 2, 2017, 
Applicant indicated that her federal and state income tax returns for tax years 2010 through 
2016 were filed late, but they had been filed. As for the past-due taxes, she was repaying 
her federal tax debts for 2010, 2011, and 2012 under an installment agreement. She 
asserted that her delinquent state income taxes for tax years 2010 and 2012 through 2015 
were satisfied in full. (Answer.) At her hearing, she testified discrepantly that she obtained 
an extension of the tax-filing deadline for 2010 and that her tax returns were filed before 
the extended deadline. (Tr. 28.) She testified that the years for which she filed late returns 
“without an extension period” were tax years 2013 through 2016, but that she filed those 
returns within the same week in October 2017.3 (Tr. 30-31.) Regarding tax payments, she 
                                                                                                                                                             
and no other records were provided showing the dates of her tax filings for the tax years alleged in the SOR. 
 
2 Applicant testified that she retained the accountant to prepare her delinquent income tax returns in 
September or October 2017. (Tr. 36.) The CPA indicates that they met on October 3, 2017. (AE A.) 
 
3It could be inferred from Applicant’s testimony that she filed for an extension of the tax-filing deadline for tax 
years 2011 and 2012, and that she filed her tax returns for those tax years within the extended deadlines. 
5 
 
testified discrepantly that the tax years covered by her installment plan with the IRS were 
2008, 2009, and 2010. (Tr. 31.) She presented no documentation confirming the dates 
when her federal and state income tax returns were filed or when her tax liabilities were 
paid.4 Correspondence of February 5, 2018, from her accountant indicates that all of 
Applicant’s federal and state income tax returns had been filed through 2016. (AE A.) He 
did not provide the dates when he completed her tax returns. As of her hearing in February 
2018, Applicant was still in the process of gathering the paperwork needed to file her 
federal and state income tax returns for tax year 2017, which were not yet due. (Tr. 18.) 
 
 Applicant understands that it was “unacceptable” and a mistake to have put off filing 
her income tax returns. She explained that because she had adjusted her withholding for 
tax purposes to “zero,” she did not think that she would owe any taxes for the years 
following the adjustment to her withholding.5 (Tr. 24.) Because of assessed interest and 
penalties totaling about $8,000, she received only about $5,600 in refunds after she filed 
her delinquent tax returns in October 2017. Applicant cites “time and bad time 
management, and prioritization” as well as her hectic work schedule as the reasons for her 
failure to file her income tax returns on time. Applicant has significant responsibilities at 
work involving all the subcontracts on a specific program to ensure that the requirements of 
the company’s prime customer, which is usually the U.S. government, are properly 
incorporated into supplier contracts and executed on time. She is passionate about her 
work, which she finds very rewarding, and she is often sought after for extra assignments. 
(Tr. 18-21, 24, 30.)  
 
 Applicant’s son recently earned his master’s degree. She continues to support her 
son financially while he seeks full-time employment commensurate with his degree. (Tr. 16, 
23.) Applicant’s mother lives with Applicant a significant portion of the year, although the 
support Applicant provides her mother is emotional rather than financial. (Tr. 14, 24.)  
 
Character References 
 
 A co-worker of Applicant’s, who holds a secret clearance for her duties as a senior 
program manager, opined that Applicant is “the best at her job.” She has been accountable 
and “always the voice of reason in very challenging situations.” Sometime in early 2018, 
Applicant informed this co-worker that she failed to file her income tax returns on time for 
three years. Applicant did not provide an explanation, but the co-worker surmised that it 
was because Applicant is “a complete workaholic.” She still considers Applicant to be 
worthy of holding a security clearance. She would believe Applicant’s promise to file her 
returns on time in the future because Applicant is someone “that will absolutely take this as 
a lesson learned.” (Tr. 42-47.) 
 
                                                 
4 If the government had information proving that Applicant owed some $27,687 in federal income taxes and 
$8,473 in state income taxes as of October 16, 2017, it was not presented in evidence at her hearing. 
 
5 Applicant testified that she changed her deduction for income tax withholding purposes three years ago in 
response to tax underpayments for previous tax years. (Tr. 31-32.) 
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 Another senior program manager at work has been with Applicant’s employer for 
over 30 years. He holds a top secret clearance and has worked collaboratively with 
Applicant for over ten years. He trusts her and considers her to be honest. She has 
demonstrated the highest ethical standards. He recently became aware that she had not 
timely filed some income tax returns, although Applicant did not share the details with him. 
He was surprised that Applicant had not made her tax filings a priority, but he thinks she 
learned her lesson. Applicant has been dedicated to her job “to a fault.” He and Applicant 
are usually the last two employees to leave at the end of the work day. He fully believes 
Applicant intends to use an accountant to file her tax returns in the future. She has made 
every commitment on the job. (Tr. 59-63.) 
 
 A retired Navy commander, who has a top secret clearance and has worked with 
Applicant for the past ten years, testified that Applicant puts in long hours at work and that 
her work is outstanding. He “absolutely” trusts Applicant and believes she is honest. 
Applicant informed him about a week before her hearing that she did not pay her taxes for 
three years. He does not know which years were involved but he got the impression that it 
was recent. He was surprised because she has always been so thorough at work. He 
would still trust her with a security clearance because she has not demonstrated any 
behavior on the job that would raise concerns. (Tr. 50-56.) 
 
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 
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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). 
 
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. . . . 
 
 Applicant was alleged to have failed to timely file her federal and state income tax 
returns for six consecutive tax years 2010 through 2016 and to owe, as of October 17, 
2017, $27,687 in delinquent federal income taxes and $8,473 in delinquent state income 
taxes. When she answered the SOR allegations, Applicant admitted she failed to timely 
comply with her income tax filing obligations, but she was repaying her past-due federal 
income taxes under an installment plan and had fully satisfied her state tax debts. At her 
hearing, she testified discrepantly from her Answer about her tax filings for some tax years: 
 
Q: Now, which tax years’ returns were not filed timely? 
 
A: Timely with an extension. You mean timely with a granted extension. ’13. 
’14, ’15, and ultimately ’16. 
 
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Q: Okay. Now what did you mean when you say with a granted extension? 
Were they filed within the agreed-to extension period? 
 
A: Yes. And that’s why I was asking for clarification. So, no, no, let me 
rephrase. If you were talking about 2010, I filed for an extension and filed 
within the extension period. If you are talking about – you then asked me a 
question which ones were not filed on time. 
 
Q: Correct. 
 
A: And I said without an extension period, 2013, 2014, ’15 and ’16. 
 
Q: And these were the returns that were all filed in October 2017? 
 
A: Correct. 
 
(Tr. 29-30.) Tax returns filed within the extended deadline are not considered late if she 
requested an extension. Her testimony about her tax returns for tax year 2010 cannot be 
reconciled with her SOR response where she admitted that she failed to timely file her 
federal and state income tax returns for tax year 2010 unless she meant that she had not 
filed her tax returns by the initial tax deadline in April 2011. In her Answer, she similarly 
admitted that she had not timely filed her federal and state income tax returns for tax years 
2011 and 2012. At her hearing, Applicant did not specifically indicate whether she had 
requested extensions for tax years 2011 and 2012, although given her response that her 
late tax filings without an extension involved tax years 2013 through 2016, it could 
reasonably be inferred that she filed her returns for tax years 2011 and 2012 within 
requested extended deadlines. Even assuming that she filed her income tax returns for tax 
years 2011 and 2012 late, there is no evidence that they were still unfiled as of the date 
she completed her SF 86 in April 2016. The evidence of late tax filing is undisputed with 
respect to tax years 2013 through 2016, however. On October 3, 2017, she met with an 
accountant to address her delinquent returns for tax years 2013 through 2016. She likely 
would have asked him to prepare her returns for tax years 2011 and 2012 if they were still 
an issue. 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,” is established because of her undisputedly late returns for tax 
years 2013 through 2016.  
 
 With regard to the tax delinquencies in the SOR, the government presented no 
documentation showing that Applicant ever owed the balances alleged. Applicant 
apparently repaid the IRS for tax years 2010, 2011, and 2012 under an installment plan. 
Her tax liability was apparently significant enough for her to adjust her tax withholding three 
years ago. When she responded to DOHA interrogatories in early October 2017, she 
checked “Yes” to whether she owed the federal government for unpaid taxes for any tax 
period between 2010 and 2016 while she denied owing any state taxes. In response to the 
SOR one month later, she indicated that with respect to her state taxes, she had satisfied 
the unpaid taxes due relative to her state income tax returns. She provided no evidence 
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showing the amount of state taxes repaid. To the extent that AG ¶ 19(c), “a history of not 
meeting financial obligations,” is triggered because of her history of delinquent federal and 
state tax liabilities, that concern is secondary in this case to her noncompliance with her 
income tax filing obligations, which is attributable to her failure to give priority to filing her 
returns and not because she lacked the funds to pay her tax liabilities. 
 
 The burden is on Applicant to mitigate the judgment concerns raised by her 
noncompliance with her income tax filing obligation for four consecutive years. One or 
more of the following conditions under AG ¶ 20 may apply: 
 
 (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; 
 
(d) the individual initiated and is adhering to a good-faith effort to repay 
overdue creditors or otherwise resolve debts; 
 
(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; 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. 
 
 Applicant’s noncompliance with her income tax filing obligation for four consecutive 
years is considered a course of conduct that persisted until she filed her delinquent returns. 
AG ¶ 20(a) cannot reasonably apply because the tax years involved are relatively recent, 
and she failed to give priority to her tax filings before October 2017. AG ¶ 20(b) also has 
not been shown to apply. Whatever her work demands, they cannot justify her inattention 
to her income tax filing obligation. Applicant knew or should have known as of April 2016 
that her delinquent income tax returns were an issue. She indicated on her SF 86 that she 
had not yet filed her federal and state income tax returns for tax years 2013 and 2014, but 
she intended to complete all filings by July 2016. As of her January 2017 OPM interview, 
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Applicant had not only made no effort to file her tax returns for tax years 2013 and 2014, 
but she had also not filed her federal and state income tax returns for tax year 2015. 
Moreover, she allowed the April 18, 2017, tax deadline for filing her 2016 tax returns to 
pass without requesting an extension of the filing deadline to October 2017.6 Applicant did 
not act responsibly within AG ¶ 20(b) by delaying her tax compliance until it became in her 
self-interest to file her delinquent returns. 
 
 Applicant’s accountant corroborates her assertions that all of her delinquent tax 
returns have been filed. While there is no substantiating evidence for her claimed 
satisfaction of her past-due taxes, it is doubtful that Applicant would reference an IRS 
installment plan and claim satisfaction if not true, given tax payments are easily verifiable.  
Applicant’s belated filing in October 2017 of her delinquent federal and state income tax 
returns for tax years 2013 through 2016 warrant consideration of AG ¶ 20(c) and ¶ 20(g). 
Her tax payments under an installment plan before the SOR was issued are mitigated 
under AG ¶ 20(c) and ¶ 20(d). At the same time, the timing of her tax filings tends to 
indicate that the issuance of DOHA interrogatories were the impetus for her to resolve her 
overdue tax returns. 
 
 Even where tax problems have been corrected and an applicant is motivated to 
present such problems in the future, the administrative judge is not precluded from 
considering an applicant’s trustworthiness in light of longstanding 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 the failure to file tax returns suggests a problem with complying 
with well-established government rules and systems. See e.g., ISCR Case No. 14-04437 
(App. Bd. Apr. 15, 2016.) Moreover, the Appeal Board recently reaffirmed that the timing of 
corrective action is an appropriate factor to consider in applying AG ¶ 20(g). See e.g., ISCR 
Case No. 17-01382 at 4 (App. Bd. May 16, 2018) (citing ISCR Case No. 17-01807 at 3-4 
(App. Bd. Mar. 7, 2018)). In reversing favorable clearance grants to applicants with tax 
issues by DOHA judges in ISCR Case No. 17-01382 (App. Bd. May 16, 2018) and ISCR 
Case No. 16-01211 (App. Bd. May 30, 2018), the Appeal Board noted that applicants who 
only begin to address their delinquent tax returns after having been placed on notice that 
their clearance might be in jeopardy may not comply with laws, rules, and regulations when 
their immediate interests are not imperiled. 
 
 Applicant’s handling of her tax matters is particularly troubling in light of her 
education level and her well-earned reputation at work for following through on her 
commitments. Applicant indicated in April 2016 that she would file her delinquent income 
tax returns by late July 2016. Not only were her returns for 2013 through 2015 unfiled as of 
her subject interview in January 2017, but she then allowed the tax deadline for her 2016 
income tax returns to pass without filing her returns or requesting an extension of the 
deadline for her 2016 taxes.  She was on notice that her tax filing issues were of concern to 
the DOD, and she had apparently received inquiries from the IRS about her missing tax 
returns. Her belated filing of her tax returns for tax years 2013 through 2016 in October 
2017 is not entitled to controlling weight in mitigation under the circumstances. Her belief 
                                                 
6 Personal income tax returns were due for tax year 2016 on April 18, 2017, or with an extension on October 
16, 2017. See www.tax.ri.gov. 
11 
 
that she would not owe any taxes for tax years 2013 through 2016 does not justify her 
years of disregard of her tax-filing obligation. 
 
Guideline E: Personal Conduct  
 
The security concerns about personal conduct are articulated in AG ¶ 15: 
 
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 or 
sensitive information. Of special interest is any failure to cooperate or provide 
truthful and candid answers during national security investigative or 
adjudicative processes. 
 
The SOR alleges that Applicant deliberately falsified her April 2016 SF 86 by 
indicating that she failed to comply with her income tax filing obligation for only tax years 
2013 and 2014 when she had also not filed her income tax return for 2015 and owed 
delinquent federal and state income taxes for some previous tax years. The evidence failed 
to establish that her returns for 2010 through 2012 were filed late. She indicated in 
response to DOHA interrogatories on October 3, 2017, that she owed federal income taxes 
for one or more of the tax years between 2010 and 2016. She completed her SF 86 on 
April 21, 2016, after the deadline passed for timely submission of her 2015 tax returns, and 
she admits she did not file for an extension. A reasonable inference of deliberate omission 
could be drawn because she knew that she had yet to file her 2015 tax returns and had not 
requested an extension of the filing deadline. Moreover, she indicated in response to the 
SOR that she had repaid federal taxes due for 2010, 2011, and 2012 under an installment 
agreement. Delinquent income taxes for those tax years should have been reported on her 
SF 86. Applicant testified discrepantly at her hearing that the taxes repaid under the 
installment plan were for 2008, 2009, and 2010. If those taxes were still unpaid as of the 
SF 86, they should have been reported. 
 
Applicant denies that she falsified or deliberately answered the tax question on the 
SF 86 incorrectly. She acknowledges that her response was “inadvertently mistaken,” and 
explained at her hearing that she was “trying to explain it and offer some information that 
[she] obviously did not state correctly.” AG ¶ 16(a) does not apply when omissions are 
inadvertent or due to mistaken understanding or other cause that negates willful intent. AG 
¶ 16(a) provides: 
 
(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 national security eligibility or 
trustworthiness, or award fiduciary responsibilities. 
 
The Appeal Board has explained the process for analyzing falsification cases, 
stating:  
12 
 
 
(a) when a falsification allegation is controverted, Department Counsel has 
the burden of proving falsification; (b) proof of an omission, standing alone, 
does not establish or prove an applicant’s intent or state of mind when the 
omission occurred; and (c) a Judge must consider the record evidence as a 
whole to determine whether there is direct or circumstantial evidence 
concerning the applicant’s intent or state of mind at the time the omission 
occurred. [Moreover], it was legally permissible for the Judge to conclude 
Department Counsel had established a prima facie case under Guideline E 
and the burden of persuasion had shifted to the applicant to present 
evidence to explain the omission. 
 
ISCR Case No. 03-10380 at 5 (App. Bd. Jan. 6, 2006) (citing ISCR Case No. 02-23133 
(App. Bd. June 9, 2004)). Applicant listed only two tax years, but they were recent tax years 
with respect to her noncompliance with her tax filing obligation. Her optional comment on 
the SF 86, “I have not filed my income tax returns on time,” would suggest that she did not 
intend to conceal her failure to comply with her tax filings. When asked about her failure to 
file her income tax returns during her January 2017, Applicant explained that she had yet to 
file her tax returns for tax years 2013, 2014, and 2015. To the extent that her failure to list 
her 2015 tax return on her SF 86 raises personal conduct concerns under AG ¶ 16(a), it is 
mitigated by AG ¶ 17(a), “the individual made prompt, good-faith efforts to correct the 
omission, concealment, or falsification before being confronted with the facts.” With so little 
information in the record about her tax debts, I cannot conclude that she intentionally 
falsified her SF 86 by failing to report known tax debts. The Government presented no 
documentation to substantiate the debt balances alleged in the SOR. 
 
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). The analysis under Guidelines F and E is incorporated in my 
whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under those 
guidelines, 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). Applicant was fully capable of 
compiling the documentation needed to prepare her income tax returns herself or provide 
the documentation to a tax professional. She asserts that she has learned her lesson, and 
intends to comply with her tax obligations on time in the future. Her dedication to her work 
with a defense contractor is unassailable, and there is no indication that she has exercised 
poor judgment on the job. At the same time, the Appeal Board has repeatedly held that the 
government need not wait until an applicant mishandles or fails to safeguard classified 
information before denying or revoking security clearance eligibility. See, e.g., ISCR Case 
No. 08-09918 (App. Bd. Oct. 29, 2009) (citing Adams v. Laird, 420 F.2d 230, 238-239 (D.C. 
Cir. 1969)). It is well settled that once a concern arises regarding an applicant’s security 
13 
 
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). Under Appeal 
Board precedent, an applicant who waits to address tax issues until his or her immediate 
interests are at stake does not show sound judgment and reliability. Her eleventh-hour 
rectification of her tax filings is too recent to create a track record of reasonable 
assurances that she can be counted on to comply with tax filing deadlines in the future. Her 
failure to give priority to such an important obligation as filing tax returns required by law 
causes lingering doubt about her security worthiness that has not been fully mitigated. 
 
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 
 
Subparagraphs 1.a-1.f:  For Applicant 
Subparagraphs 1.g-1.n:  Against Applicant 
 
Paragraph 2, Guideline E:   FOR APPLICANT 
 
Subparagraph 2.a:   For Applicant 
 
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