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      DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
) ISCR Case No. 17-01587 
) 
Applicant for Security Clearance ) 
Appearances 
For Government: Adrienne Driskill, Esq., Department Counsel 
For Applicant: Pro se 
______________ 
Decision 
______________ 
HEINY, Claude R., Administrative Judge: 
Applicant contests the Department of Defense’s (DoD) intent to deny his eligibility 
for a security clearance to work in the defense industry. Applicant failed to timely file his 
2013, 2014, and 2015 Federal income tax returns and his 2015 state income tax return. 
The Statement of Reasons (SOR) listed two student loan obligations of approximately 
$27,000 and three charged-off accounts totaling approximately $750. He has filed his tax 
returns and received sizable refunds. He paid his charged-off accounts and is current on 
his student loan obligation. He has made sufficient progress toward resolving his past-
due debts to continue his security clearance eligibility. Applicant’s eligibility for access to 
classified information is granted.  
Statement of the Case 
On June 2, 2017, 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 
03/05/2019
 
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to find it clearly consistent with the national interest to grant or continue security clearance 
eligibility for him.1  
 
On June 30, 2017, Applicant answered the SOR allegations and requested a 
hearing before an administrative judge from the Defense Office of Hearings and Appeals 
(DOHA). On February 7, 2018, DOHA issued a Notice of Hearing scheduling a hearing 
that was conducted on February 27, 2018. At the hearing, six Government exhibits (Ex. 
1-6) and eleven Applicant exhibits (Ex. A-K) were admitted into evidence without 
objection. Records submitted by Applicant as attachments to his answer were considered. 
Applicant testified, as reflected in a transcript (Tr.) received on March 7, 2018. I held the 
record open after the hearing for Applicant to submit additional documents which were 
received through January 2019, and were admitted into the record as Ex. L – AG.  
 
While this case was pending a decision, the Director of National Intelligence issued 
Security Executive Agent Directive 4, establishing the National Security Adjudicative 
Guidelines for Determining Eligibility for Access to Classified Information or Eligibility to 
Hold a Sensitive Position (AGs), which he made applicable to all covered individuals who 
require initial or continued eligibility for access to classified information or eligibility to hold 
a sensitive position. The new AGs supersede the Sept. 1, 2006 AGs and are effective “for 
all covered individuals” on or after June 8, 2017. Accordingly, I have evaluated Applicant’s 
security clearance eligibility under the new AGs.2 
 
Findings of Fact 
 
In Applicant’s answer to the SOR, he denied the allegations of failing to file his 
Federal tax returns in a timely manner (SOR 1.a), failing to file his state income tax returns 
in a timely manner (SOR 1.b), and denied owing a gas utility bill (SOR 1.g), which he 
asserted he had paid. He admitted the remaining four delinquent obligation allegations. 
After a thorough review of the pleadings and exhibits, I make the following findings of fact. 
 
Applicant is a 42-year-old senior software engineer who has worked for a defense 
contractor since February 2015. (Tr. 39, Tr. 18) He seeks to obtain a security clearance. 
(Ex. 1) He previously held a clearance from 2005 to 2015, with a different defense 
company. (Tr. 19) He honorably served in the U.S. Navy from July 1994 through June 
1995. (Ex. 1, Tr. 18) He is married and has a son age 19 and twins aged 17. (Ex. 1) In 
May 1999, he obtained a bachelor-of-science degree in computer science. (Tr. 19) 
Applicant’s monthly income after taxes is $4,800 to $5,000. (Tr. 48) His wife’s income 
                                                          
1 The DoD CAF took the action under Executive Order 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. 
 
2 Application of the AGs that were in effect as of the issuance of the SOR would not change my decision in 
this case. The new AGs are available at http://ogc.osd.mil/doha/5220-6 R20170608.pdf. 
  
 
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varies. His wife operated her own business making craft items sold at craft shows. (Tr. 
27, 48) 
 
 In 2011, Applicant made a job-related relocation from Texas to Florida. (Tr. 54) In 
February 2015, Applicant made another job-related relocation from Florida to his current 
state. (Ex. 1, Ex. E, Tr.25) On June 26, 2017, he filed a 2015 part-year resident state 
income tax return. (Ex. E, AE) He listed $61,439 state income, $2,666 of state withholding 
tax, and a refund due of $2,613. (Ex. E) 
 
On Applicant’s September 2015 Electronic Questionnaires for Investigations 
Processing (e-QIP), he indicated he had not filed his 2013 Federal income tax return 
because he could not locate all the documentation he needed to file the return. (Ex. 1) In 
his August 2015 enhanced subject interview, he indicated he had not filed his 2013 or 
2014 Federal tax returns3 because he was missing documents and planned to file the 
returns by December 2015. (Ex. 2) His tax filings were further delayed when his tax 
documents were boxed up when he moved in February 2015. (Ex. 5) He was in the 
process of filing his returns when things became misplaced during the move. (Tr. 22)  
 
In November 2016, Applicant contacted the Internal Revenue Service (IRS) about 
his failure to file his 2013, 2014, and 2015 returns. (Tr. 30) He was granted an extension 
until December 2016 and told if he was unable to meet the deadline, he should continue 
working to get his returns filed. (Ex. 5, Tr. 28) He had initially received an extension on 
the 2013 Federal income tax filing due date, but that extension did not extend until the 
returns were actually filed in June 2017. (Tr. 28) He did not request an extension for tax 
year 2014 or 2015 because he believed he could do nothing with his 2014 or 2015 returns 
until he had filed his 2013 return. (Tr. 29)  
 
Once Applicant had obtained the bank statements and other missing document he 
needed to file his 2013 return, he did so. (Tr. 30) Once his 2013 return was filed, he was 
able to complete his 2014 and 2015 returns. (Tr. 30) Applicant submitted a copy of his 
2013 Federal income tax return signed on February 1, 2017, copies of his 2014 and 2015 
Federal income tax returns signed and dated June 26, 2017, and a copy of his 2015 state 
income tax return signed and dated June 24, 2017. (Ex. B, C, D, E, and SOR Response4) 
His 2015 Federal tax return listed wages of $85,152, a $9,528 business loss, $5,750 
Federal tax withheld, and a refund due of $3,039. (Ex. B) His 2014 Federal tax return, 
dated June 26, 2017, listed wages of $83,205, an $8,998 business loss, $5,755 Federal 
income tax withheld, and a refund due of $3,531. (Ex. C) His 2015 Federal tax return, 
dated June 26, 2017, listed wages of $97,183, a $469 business loss, $8,651 Federal 
income tax withheld, and a refund due of $3,637. (Ex. D) He received a Federal tax 
extension for tax year 2016, and he made a timely filing of that year’s returns. (Tr. 32) 
                                                          
3 During 2013 and 2014, Applicant lived in a state that did not have personal income tax. (Ex. 1, Ex. 5) 
  
4 The copies of Applicant’s tax returns that accompanied his SOR Response were much more complete, 
contained additional schedules and forms, and included an additional state return not included in the 
documents presented at the hearing.  
 
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Applicant used the refunds of $12,800 to pay his wife’s student loan obligation and to 
make payments on his debts. (Tr. 57) 
 
Applicant asserts he now has a better way of collecting the data he needs to file 
his taxes. (Tr. 45) He is more vigilant and disciplined in the collection of the data. He now 
puts everything on a spreadsheet including a budget, when bills are due, and data needed 
when filing his tax returns. (Tr. 46) His wife pays her taxes on her business monthly. (Tr. 
48) 
 
In April 2013, his 2005 Honda automobile was “totaled” in the accident when he 
was rear ended by an ambulance. (Tr. 21) The ambulance caved in the back end of his 
vehicle. (Tr. 21) On his e-QIP, he listed medical bills of $3,200 and incurred during the 
accident. (Ex. 1) He incurred $1,500 in medical bills for a rotator cuff injury, and his wife 
incurred $3,500 in medical bills for a dislocated disc. (Ex. 2, Tr. 21) He did not pay the 
debts because he was waiting for settlement from the ambulance company. (Ex. 2, Tr. 
25) It took four years of working with the ambulance company’s insurance company to 
address a portion of the medical bills. (Tr. 23)  
 
Applicant has continued making payments on his medical bills and has paid off 
numerous medical bills. (Ex. L, N, O, X, Y, Z, AA, AB, AC) He paid more than $5,000 on 
his wife’s medical bills resulting from the automobile accident. The SOR does not list any 
medical bills as being past due, charged-off, or in collection.  
At the time of the accident, Applicant owed $11,093 on his vehicle. The insurance 
companies paid 75% of the car’s value, which was $7,800 leaving a balance owed of 
$3,293 (SOR 1.d). (Tr. 24) The SOR lists an $8 charged-off account (SOR 1.d). Applicant 
admits he owed $3,292 on the account. In June 2017, the creditor offered to settle the 
debt for $1,317. (SOR Response) Applicant accepted and paid the settlement offer. (Ex. 
I, Tr. 42) The debt has been paid. His February 2018 credit report lists a zero balance 
and zero past due on this debt. (Ex. 6) 
Between 1995 and 1999, Applicant incurred student loan obligations. (Ex. 2) He 
made regular payments on his student loans until 2002 when unemployment caused his 
payments to become irregular. (Ex. 2, Tr. 55) At some point, he stopped making payments 
until 2004, when he started making irregular payments. He continued making irregular 
payments until the April 2013 automobile accident. (Ex. 2, Tr. 55) In 2015, the accounts 
were again in forbearance. He requested forbearance so he could address some medical 
bills. (Tr. 34, 35) In a February 2018, Applicant’s student loan services’ provided a letter 
stating his student loan forbearance had been approved. (Ex. G) His next monthly 
payment of $167 was due on May 7, 2018. (Ex. 2, Ex. G, Ex. K)  
Applicant’s April 2015 credit report lists the two student loan obligations as being 
“paid as agreed.” (Ex. 3) His August 2016 credit report lists the loans as being 
approximately $900 past due. (Ex. 4) His February 2018 credit report lists, both accounts 
with zero past due. (Ex. 6) One student loan had a balance of $2,717 with a scheduled 
$17 monthly payments and the other had a balance of $28,971 with scheduled monthly 
payments of $182. (Ex. 6) The two student loans have now been consolidated into a 
 
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single loan with monthly payments of $207. (Tr. 33) He provided documentation of timely 
payments of his $207 student loan payments through January 2019. (Ex. S, T, W, AD, 
AF) 
Applicant’s April 2015 credit report, lists 15 accounts as being paid as agreed that 
includes two student loans. (Ex. 3) The report also showed the auto loan on the wrecked 
Honda was listed as $2,675 past due. His most recent credit report, February 2018, listed 
eight accounts all of which indicate a zero-past-due amount. (Ex. 6) As previously 
discussed, the auto loan was settled and paid. Applicant has read books on how to get 
out of debt, how to manage one’s money, becoming debt free, and financial management. 
(Tr. 45) In March 2018, he attended the first session of a financial planning course. (Ex. 
M) In May 2018, he completed a financial planning course. (Ex. L) 
 
Applicant’s $250 gas bill (SOR 1.g) was paid, and his most recent credit report 
listed no amount as past due. (Ex. H) The $496 power bill (SOR 1.f) was paid, and there 
was no amount past due. (Ex. J) The two utility bills were the last bills for services received 
just before he left the state and moved to his current state. (Tr. 43, 44) 
 
Applicant is current on his $1,800 monthly rent. He has a 2007 and two 2008 
automobiles, all of which were purchased used. (Tr. 50) His car payments were $600 
monthly. (Tr. 50) Following the hearing, he paid off two of his vehicles, thereby eliminating 
monthly payments of $246 and $218. (Ex. 4, 6, L, AF) He is current on his utility bills, 
insurance, and student loan payments. (Tr. 51) He has $3,200 in his 401(k) retirement 
plan. (Tr. 52) He contributes two percent of his wages to his retirement plan, which is 
matched by two percent by his employer. (Tr. 53) He has approximately $3,000 in a 
savings account and $1,800 in his checking account. (Tr. 58) Applicant is timely repaying 
his former company’s for tuition reimbursement. (Ex. R, U, V) 
On Applicant’s April 2015 e-QIP, he indicated he was currently working with his 
mortgage company to resolve a second mortgage debt incurred when he was unable to 
sell the home when his job relocated him to a new state in September 2011. (Ex. 1, Ex. 
2, Tr. 26) He had found a buyer for a short sale. The short sale was unsuccessful, and 
the house went to foreclosure. (Tr. 54) Applicant’s February 2018 credit report lists a zero 
balance and zero past due on this debt. (Ex. 6) The debt was settled and paid. (Tr. 27, 
54) The mortgage debt was not listed as a debt of concern in the SOR.  
Applicant’s 2017 performance evaluation form indicated Applicant was always 
positive and encouraged other team members. His overall rating was 
“Achieved/Substantially Achieved.” (Ex. F)  
 
Policies 
 
 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 must be considered in evaluating 
an applicant’s eligibility for access to classified information. 
 
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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 overarching 
adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(a), 
the adjudication process is an examination of a sufficient period and a careful weight of a 
number of variables of an individual’s life to make an affirmative determination that the 
individual is an acceptable security risk. This is known as the whole-person concept.  
 
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 
the applicant may deliberately or inadvertently fail to safeguard classified information. 
Such decisions entail a certain degree of legally permissible extrapolation of potential, 
rather than actual, risk of compromise of classified information. 
  
Section 7 of Executive Order 10865 provides that decisions shall be “in terms of 
the national interest and shall in no sense be a determination of 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 
 
 Adjudicative Guideline (AG) ¶ 18 articulates the security concerns relating to 
financial problems: 
 
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 . . . An individual who is financially 
 
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overextended is at greater risk of having to engage in illegal or otherwise 
questionable acts to generate funds. 
 
Additionally, an individual who is financially irresponsible may also be 
irresponsible, unconcerned, negligent, or careless in properly handling and safeguarding 
classified information. Behaving responsibly or irresponsibly in one aspect of life provides 
an indication of how a person may behave in other aspects of life. 
 
A person’s relationship with his creditors is a private matter until evidence is 
uncovered demonstrating an inability or unwillingness to repay debts under agreed-upon 
terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant 
with a history of serious or recurring financial difficulties is in a position of risk that is 
inconsistent with holding a security clearance. An applicant is not required to be debt free, 
but is required to manage his finances to meet his financial obligations. 
 
Applicant failed to timely file his Federal income tax returns for tax years 2013, 
2014, and 2015, and he failed to timely file his 2015 state tax return. Additionally, he owed 
approximately $27,000 on his student loans and had three additional charged-off debts, 
which totaled $744. AG ¶ 19 includes four disqualifying conditions that could raise a 
security concern any may be disqualifying in this case: “(a) inability to satisfy debts;” “(b) 
unwillingness to satisfy debts regardless of the ability to do so;” “(c) a history of not 
meeting financial obligations;” and “(f) failure to file or fraudulently filing annual Federal, 
state, or local income tax returns or failure to pay annual Federal, state, or local income 
tax as required.” 
 
Security concerns having been raised, the burden shifted to Applicant to produce 
evidence to rebut, explain, extenuate, or mitigate the security concerns. (Directive ¶ 
E3.1.15) An applicant has the burden of proving a mitigating condition, and the burden of 
disproving it never shifts to the Government. (See ISCR Case No. 02-31154 at 5 (App. 
Bd. September 22, 2005)). Applicant has the burden of presenting evidence of 
explanation, extenuation, or mitigation to overcome the financial considerations security 
concerns.  
 
The Appeal Board concisely explained Applicant’s responsibility for proving the 
applicability of mitigating conditions as follows:  
 
Once a concern arises regarding an Applicant’s security clearance 
eligibility, there is a strong presumption against the grant or maintenance of 
a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th 
Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government 
presents evidence raising security concerns, the burden shifts to the 
applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The 
standard applicable in security clearance decisions is that articulated in 
Egan, supra. “Any doubt concerning personnel being considered for access 
to classified information will be resolved in favor of the national security.” 
Directive, Enclosure 2 ¶ 2(b).  
 
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ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013).  
 
The following mitigating conditions under AG ¶ 20 are potentially applicable: 
 
(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; 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. 
 
In 2011, Applicant made a job-related relocation from Texas to Florida and in 
February 2015, Applicant made another job-related relocation from Florida to his current 
state. In April 2013, he incurred medical expenses when his automobile was “totaled” in 
an accident. His vehicle was rear ended by an ambulance that caved in the back end of 
his vehicle. His automobile insurance paid only 75 percent of the value of his vehicle. 
These are factors beyond his control. When one job ends and a new job is in a different 
state, the loss of employment and costs of moving are factors beyond one’s control. AG 
¶ 20(b) applies.  
 
Applicant has read books on how to get out of debt, how to manage one’s money, 
becoming debt free, and financial management. He attended multiple sessions of a 
financial planning course, which he completed in May 2018. Applicant is current on his 
utility bills, insurance, and his $1,800 monthly rent. He has paid off two of his automobile 
loans reducing his $600 monthly car payments by more than $450. He has $3,200 in his 
401(k) retirement plan, contributes regularly to his retirement plan has approximately 
$3,000 in a savings account, and $1,800 in his checking account. He is current on his 
student loan obligation, paid the three charged-off accounts, filed his delinquent tax 
returns, and received sizable tax refunds. His financial counseling course was provided 
 
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by a legitimate and credible source. There are clear indications that the problem is being 
resolved or is under control. AG ¶ 20(c) applies.  
 
AG ¶ 20(a) has limited applicability. Applicant had three debts in addition to his 
student loan obligation, which indicates his delinquent obligations were few. His initial 
failure to file his 2013 tax return was due to a lack of documents necessary to prepare his 
return. He now has a better way of collecting the data he needs to file his taxes. He is 
more vigilant and disciplined in his data collection, and he puts everything on a 
spreadsheet including a budget, when bills are due, so that the data needed is available 
when he has to file his taxes. It is unlikely his non-timely filing of his tax returns will recur. 
His current handling of his finances does not cast doubt on his current reliability, 
trustworthiness, or good judgment. 
 
Applicant had three charged-off debts totaling $744, which have been paid. AG ¶ 
20(d) applies to these three debts. The largest listed SOR debts were his two student 
loan obligations that totaled just over $27,000. He is current on his student loan obligation. 
His April 2015 credit report lists the two student loan obligations as being “paid as agreed.” 
His August 2016 credit report lists the loans as being approximately $900 past due. His 
February 2018 credit report lists zero past due on each account. He provided 
documentation of timely payments of his $207 student loan payments through January 
2019. AG ¶ 20(d) applies to his student loan obligation.  
 
Applicant failed to timely file his 2013, 2014, and 2015 Federal income tax returns 
and his 2015 state income tax return in a timely manner. He requested various filing 
extensions, but the extensions did not extend until February 2017 and June 2017 when 
all the delinquent returns were filed. A willful failure to timely make (means completed and 
filed with the IRS) a federal income tax return is a misdemeanor-level federal criminal 
offense.5 The failure to timely file federal tax returns has security implications because: 
 
Failure to file tax returns suggests that an applicant has a problem with 
complying with well-established governmental rules and systems. Voluntary 
compliance with such rules and systems is essential for protecting classified 
information. ISCR Case No. 01-05340 at 3 (App. Bd. Dec. 20, 2002). As we 
                                                          
5Title 26 U.S.C, § 7203, willful failure to file return, supply information, or pay tax, reads: 
  
Any person . . . required by this title or by regulations made under authority thereof to 
make a return, keep any records, or supply any information, who willfully fails to . . . make 
such return, keep such records, or supply such information, at the time or times required 
by law or regulations, shall, in addition to other penalties provided by law, be guilty of a 
misdemeanor . . . .  
 
A willful failure to make tax return, keep records, or supply information when required, is 
a misdemeanor without regard to existence of any tax liability. Spies v. United States, 
317 U.S. 492 (1943); United States v. Walker, 479 F.2d 407 (9th Cir. 1973); United States 
v. McCabe, 416 F.2d 957 (7th Cir. 1969); O’Brien v. United States, 51 F.2d 193 (7th Cir. 
1931). For purposes of this decision, I am not weighing Applicant’s failure to timely file 
his federal income tax returns against him as a federal crime. 
 
 
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have noted in the past, a clearance adjudication is not directed at collecting 
debts. See, e.g., ISCR Case No. 07-08049 at 5 (App. Bd. Jul. 22, 2008). By 
the same token, neither is it directed toward inducing an applicant to file tax 
returns. Rather, it is a proceeding aimed at evaluating an applicant’s 
judgment and reliability. Id. A person who fails repeatedly to fulfill his or her 
legal obligations does not demonstrate the high degree of good judgment 
and reliability required of those granted access to classified information. 
See, e.g., ISCR Case No. 14-01894 at 5 (App. Bd. Aug. 18, 2015). See 
Cafeteria & Restaurant Workers Union Local 473 v. McElroy, 284 F.2d 173, 
183 (D.C. Cir. 1960), aff’d, 367 U.S. 886 (1961).  
 
The Appeal Board ruled that “even in instances where an “[a]pplicant has 
purportedly corrected [his or her] federal tax problem, and the fact that [applicant] is now 
motivated to prevent such problems in the future, does not preclude careful consideration 
of [a]pplicant’s security worthiness in light of [his or her] longstanding prior behavior 
evidencing irresponsibility” including a failure to timely file federal income tax returns. See 
ISCR Case No. 15-01031 at 3 and note 3 (App. Bd. June 15, 2016). 
 
In this instance AG ¶ 20(g) applies because Applicant has filed all delinquent tax 
returns and received tax refunds totaling more than $12,800. He used the refunds to pay 
his wife’s student loan obligation and to make payments on various other debts. He 
initially failed to timely file his 2013 Federal return because he did not have the necessary 
documents related to his wife’s business. His tax filings were further delayed when his 
tax documents were boxed up when he moved in February 2015. He was in the process 
of filing his returns when things became misplaced during the move.  
 
The timing of an applicant’s efforts at debt resolution is relevant in evaluating the 
sufficiency of his case for mitigation. Applicant began his efforts to resolve his tax issues 
problems before he was placed on notice that his clearance was in jeopardy. In November 
2016, prior to the issuance of the June 2017 SOR, Applicant contacted the IRS about his 
failure to file his 2013, 2014, and 2015 returns. He was granted an extension until 
December 2016 and told if he was unable to meet the deadline, he should continue 
working to get them filed as soon as possible.  
 
Applicant believed he was prevented from filing his 2014 and 2015 returns until he 
had completed and filed the 2013 return. This is an incorrect, but understandable, 
assumption. In general, each tax year is an independent entity. In actuality, nothing 
prevents a taxpayer from completing a tax return simply because the prior year’s return 
had not been filed because a taxpayer is permitted to estimate information for filing when 
actual information is not available. 6 However, Applicant’s assumptions are reasonable. I 
                                                          
6 When tax information is unavailable, the taxpayer is supposed to provide a good-faith estimate and 
disclose the estimation to the IRS. See American Institute of Certified Public Accountants website, 
“Standards for Tax Services No. 4, Use of Estimates,” 
https://www.aicpa.org/interestareas/tax/resources/standardsethics/statementsonstandardsfortaxservices/
downloadabledocuments/ssts-no.4-use-of-estimates.pdf.  
 
 
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find Applicant’s failure to complete his 2013 return is a reasonable explanation for his 
failure to file his 2014 and 2015 returns in a timely manner.  
 
Based on Applicant’s track record of filing his delinquent tax returns and receiving 
refunds, paying or resolving the three other listed debts, being current on his student loan 
obligation, and current on his rent, car payment, utility bills, and his saving and retirement 
accounts, there are clear indications that his past financial problems are resolved and his 
finances are under control. He has shown good faith in addressing his debts. He has 
sufficient income to keep his financial obligations in current status and to continue paying 
his $207 monthly student loan obligation. I am confident that Applicant will conscientiously 
endeavor to maintain his financial responsibility. His efforts are sufficient to mitigate 
financial considerations trustworthiness concerns.  
 
Whole-Person Concept 
 
Under the whole-person concept, the administrative judge must evaluate an 
Applicant’s eligibility for a public trust position by considering the totality of the Applicant’s 
conduct and all the circumstances. The administrative judge should consider the nine 
adjudicative process factors listed at AG ¶ 2(d):  
 
(1) the nature, extent, and seriousness of the conduct; (2) the 
circumstances surrounding the conduct, to include knowledgeable 
participation; (3) the frequency and recency of the conduct; (4) the 
individual’s age and maturity at the time of the conduct; (5) the extent to 
which participation is voluntary; (6) the presence or absence of rehabilitation 
and other permanent behavioral changes; (7) the motivation for the conduct; 
(8) the potential for pressure, coercion, exploitation, or duress; and (9) the 
likelihood of continuation or recurrence.  
 
 Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a 
security clearance must be an overall common sense judgment based upon careful 
consideration of the guidelines and the whole-person concept. I considered the potentially 
disqualifying and mitigating conditions in light of all the facts and circumstances 
surrounding this case. My comments under Guideline F are incorporated in my whole-
person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline 
but some warrant additional comment. 
 
A security clearance adjudication is an evaluation of an individual’s judgment, 
reliability, and trustworthiness. It is not a debt-collection procedure. Applicant is a 42-year-
old senior software engineer who has been employed by a defense contractor since 
February 2015. He honorably served in the U.S. Navy from July 1994 through June 1995. 
 
The largest of the SOR debts of concern were two student loan obligations, which 
are current. Incurring a student loan is seen as an obligation incurred to improve an 
individual’s life, with respect to future employment and career prospects, and, as such, is 
viewed differently than a debt obligation incurred to purchase a new car or incurred for 
 
12 
credit card debt. He filed his delinquent tax returns and has established a “meaningful 
track record” in the repayment of his student loan obligation. Other than his student loan 
obligation, the only delinquent obligations listed on the SOR totaled less than $750. 
 
I have carefully applied the law, as set forth in Egan, Exec. Or. 10865, the Directive, 
DOD Manual 5200.02, and the AGs, to the facts and circumstances in the context of the 
whole person. The issue is not simply whether all the delinquent obligations have been 
paid—it is whether his financial circumstances raise concerns about his fitness to hold a 
security clearance. (See AG & 2(c)) Overall, the record evidence leaves me without 
questions and doubts about Applicant’s eligibility and suitability for a security clearance. 
For all these reasons, I conclude Applicant has mitigated the financial considerations 
security concerns. 
 
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, Financial Considerations: FOR APPLICANT 
 
  Subparagraphs 1.a – 1.g:  For Applicant 
  
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is clearly 
consistent with the national interest to grant Applicant a security clearance. Eligibility for 
access to classified information is granted.  
 
 
_______________________ 
CLAUDE R. HEINY II 
Administrative Judge