1 
   DEPARTMENT OF DEFENSE 
     DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of:  ) 
 ) 
 ) ADP Case No. 17-03967 
 ) 
Applicant for Public Trust Position  ) 
Appearances 
For Government: Kelly Folks, Esq., Department Counsel 
For Applicant: I. Charles McCullough, III, Esq. 
______________ 
Decision 
______________ 
Curry, Marc E., Administrative Judge: 
Applicant has filed her delinquent income tax returns, obtained a Chapter 7 
bankruptcy discharge of approximately 90 percent of the outstanding balance due, and has 
organized a payment plan for the remaining balance. These facts, when considered 
together with the cause of her income tax problems, compel me to conclude she has 
mitigated the trustworthiness concerns.  Eligibility to continue working in a public trust 
position is granted.   
Statement of the Case 
On December 4, 2017, the Department of Defense Consolidated Adjudications 
Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing the 
trustworthiness concerns under Guideline F, financial considerations, explaining why it was 
unable to find it clearly consistent with the national interest to grant her a position of trust. 
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 Security Executive Agent Directive 4, effective June 8, 2017. 
03/05/2019
2 
 
On December 22, 2017, Applicant answered the SOR allegations, admitting all of 
the allegations, and requesting a hearing, whereupon the case was assigned to me on July 
20, 2018.  On September 13, 2018, the hearing was scheduled for October 31, 2018. The 
hearing was held as scheduled. I received eight Government exhibits (GE 1 – 8) and 12 
Applicant exhibits (AE A – AE L). In addition, I considered the testimony of Applicant and 
two character witnesses. At the close of the hearing, I left the record open at Applicant’s 
counsel’s request, to allow him to submit additional exhibits. Within the time allotted, 
Applicant’s counsel submitted two additional exhibits that I incorporated into the record as 
AE M and AE N. The transcript (Tr.) was received on November 9, 2018. 
 
Procedural Ruling 
 
 While reviewing the case file, I discovered an additional exhibit that Applicant’s 
counsel submitted, which was unmarked and unidentified. After informing both parties of 
the oversight, I marked it as AE O, and provided a copy of the document to Department 
Counsel, who had no objection to its admission.  
  
Findings of Fact 
 
  Applicant is a 45-year-old single woman with two children. She has been married 
previously, from 2000 to 2014. The marriage ended in divorce. (Tr. 74) She earned a 
bachelor’s degree in 1995. Applicant is an information technology professional who 
oversees the processing of military health data. (AE J at 5) She has been employed in this 
line of work since 1995. (Tr. 42) 
 
 Applicant is highly respected on the job. Her supervisor characterized her work as 
stellar. (Tr. 17) Per a team member from another company, Applicant has in-depth 
knowledge of data processing and is a critical member of the team. (AE J at 4) 
 
 Applicant failed to file her federal and state income tax returns timely for tax years 
2009 to 2013. (Answer at 1) She attributes her failure to file income tax returns to her 
troubled marriage, which by 2009 had begun to deteriorate. Specifically, her husband 
whose $140,000 salary exceeded hers by $40,000, “wasn’t pulling his weight” with the filing 
of tax returns and the corresponding tax bills, leaving her solely responsible for their filing 
and payment each year. (Tr. 50) By 2009, she “had had it.” (Tr. 50) Consequently, she told 
him that she was no longer going to file the tax returns and pay the tax debts, and that he 
had to do it. (Tr. 51) 
 
 Applicant’s husband did not file the federal and state tax returns either for 2009 or 
2010. (Tr. 53) Periodically, Applicant would ask him if he had filed them, and he would 
reassure her that he was working on them. (Tr. 81-83) Unbeknownst to Applicant, her 
husband filed his income tax returns individually. Ultimately, she did not discover that he 
was not filing the income tax returns jointly until 2011, when he moved from the family 
home. (Tr. 83)  
 
3 
 
 After Applicant’s husband left her, her financial problems snowballed. (Tr. 53) 
Despite earning a higher salary, he paid less than half of the children’s expenses. 
Moreover, although they shared joint custody, the children stayed with Applicant 
approximately 75 percent of the time. (Tr. 80) 
 
 Applicant remained hopeful that she and her husband would reconcile and that he 
would help her with her financial problems. Although they made some attempts at 
reconciliation, he never moved back into the home. In 2015, he told her that he was in love 
with someone else, was filing for divorce, and getting remarried. (Tr. 44) Preoccupied and 
emotionally devastated by her failing marriage,1 Applicant had failed to file her state and 
federal income tax returns for 2011 to 2013, in addition to 2009 and 2010, by the time her 
divorce was finalized. (Tr. 57) 
 
 As part of the divorce settlement, Applicant’s ex-husband was supposed to pay part 
of the tax delinquency. (Tr. 55) He did not do so. After the divorce was finalized, Applicant 
retained an attorney to help her file her delinquent income tax returns. (GE 7) By this time, 
the federal government had entered a lien against her property for $214,039 in federal 
income taxes, and she owed approximately $15,000 in delinquent state income taxes for 
tax years 2009 through 2014. (GE 7 at 1; Item 2 at 3-4; Answer at 1) With the help of her 
attorney, she filed her state income tax returns, and negotiated a payment plan with the 
state tax authority. (Item 2 at 4) Beginning in September 2015, she began making $950 
monthly payments consistent with the plan. By September 2017, she had satisfied her 
state income tax delinquency. (GE 3 at 20)  
 
 Applicant’s attorney attempted to negotiate an offer-in-compromise (OIC) with the 
Internal Revenue Service (IRS). Through her attorney, Applicant proposed to make 
monthly payments for the part of the delinquency from 2009 through 2013 that remained 
legally collectible, totaling 24 months. (GE 7 at 2) OIC negotiations lasted approximately a 
year between 2016 and 2017. While negotiations were pending, Applicant paid $675 per 
month towards the delinquency. (Tr. 120) 
 
 The IRS rejected the proposed OIC. (GE 7 at 2) Applicant’s attorney then referred 
her to a bankruptcy attorney. On August 14, 2017, Applicant filed for Chapter 13 
bankruptcy protection (AE D at 1) The case was later converted to a Chapter 7 bankruptcy. 
Under the plan, she sought a discharge of her tax debts from 2009 to 2014. On September 
12, 2018, the court discharged all of the debt for tax years 2009 through 2013. (AE B, AE 
C) It denied her request to discharge the 2014 bankruptcy, reasoning that it remained a 
priority debt because of its recency. (AE D at 1) 
 
 Applicant then contacted the IRS and entered into an installment agreement to pay 
the remaining 2014 income tax balance, totaling $26,868. (AE D at 1; AE E) Monthly 
payments of $430 were scheduled to begin in November 2018. (AE N) The lien remains 
outstanding. 
 
                                                 
1 Applicant’s emotional distress from the marital separation was so acute that it prompted her doctor to 
prescribe her anti-depressants. (Tr. 122) 
4 
 
 Applicant has been filing her taxes timely since 2015. Her federal tax payments from 
2015 through 2017 are all up-to-date and no balance is owed. (AE M) She has been 
making payments on her 2018 tax returns on a quarterly basis. Payments are current. (Tr. 
57) 
 
 Applicant currently earns between $100,000 and $110,000. She maintains a budget 
and has between $200 and $300 of monthly discretionary income. (Tr. 117) She credits the 
financial management course she took as part of the bankruptcy proceedings with 
improving her financial management skills. (Tr. 114)  
 
Policies 
 
When evaluating an applicant’s suitability for a trustworthiness position, 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. 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. 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 trustworthiness determination. 
 
Under the whole-person concept, 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).2  
 
 
                                                 
2 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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Analysis 
 
Guideline F, Financial Considerations 
 
 The trustworthiness concerns about financial considerations are set forth in AG ¶ 
18: 
 
Failure or inability 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. . . . .  
 
 Applicant failed to file or pay her federal and state income tax delinquencies on time 
between 2009 and 2013. As of 2017, a lien was entered against her property for 
outstanding delinquent income taxes, including for tax year 2014. The following 
disqualifying conditions apply under AG ¶ 19:  
 
(a) inability to satisfy debts; 
 
(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 taxes, as 
required. 
 
 The following mitigating conditions are potentially applicable:  
 
AG ¶ 20(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;  
 
AG ¶ 20(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;  
 
AG ¶ 20(d) the individual initiated and is adhering to a good-faith effort to 
repay overdue creditors or otherwise resolve debts; and 
 
AG ¶ 20(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. 
 
6 
 
 Applicant’s failure to file and pay her federal and state income taxes coincided with 
her emotional trauma resulting from the deterioration of her marriage. Conversely, her 
failure to file her income tax returns began two years before her marital separation and 
lasted for two additional years through 2013. Ultimately, however, after Applicant finally 
accepted that she and her husband were not reconciling, she began actively attempting to 
resolve her income tax debts. She retained an attorney, filed her returns, satisfied her state 
delinquency through a negotiated payment arrangement, and attempted to negotiate a 
payment arrangement with the IRS. After her attempts at executing an OIC with the IRS 
failed, she consulted a bankruptcy attorney upon the advice of her tax attorney, and filed 
for bankruptcy protection. She obtained a discharge of all of her federal income tax debt 
except $25,000 owed for tax year 2014, which she has arranged to pay through an 
installment plan. Consequently, although Applicant did not initially act responsibly with 
respect to her financial problems when her marriage first began to deteriorate, she has 
been acting responsibly since 2015 after the divorce was finalized. On balance, I conclude 
that AG ¶ 20(b) applies. 
 
 Applicant has filed all her delinquent federal and state income tax returns. She has 
satisfied the state income tax delinquency in its entirety, attended financial counseling, and 
developed an installment plan to pay the remaining federal tax delinquency. She maintains 
a budget and has enough money to pay the anticipated $430 monthly tax payment. Under 
these circumstances, AG ¶¶ 20(c), 20(d), and 20(g), apply. In sum, Applicant has mitigated 
the financial considerations security concern. 
 
Whole-Person Concept 
 
 Failure to file one’s income tax returns is a serious transgression. Applicant’s 
judgment, however, was clouded by the emotional trauma she experienced related to the 
deterioration of her marriage. Once she accepted that her marriage was over, she began 
taking prudent steps to resolve her delinquent income tax debts. Currently, all but 
approximately ten percent of her federal and state income taxes have been either 
discharged, or satisfied, and she has developed a plan to pay the remainder. Under these 
circumstances, I conclude that Applicant has mitigated the trustworthiness concerns. 
 
Formal Findings 
 
Formal findings for against Applicant on the allegations set forth in the SOR, as 
required by section E3.1.25 of Enclosure 3 of the Directive, are: 
 
Paragraph 1, Guideline F:    FOR APPLICANT 
 
Subparagraphs 1.a – 1.i:     For Applicant 
 
 
 
 
 
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Conclusion 
 
In light of all of the circumstances presented by the record in this case, it is clearly 
consistent with the interests of the United States to grant Applicant eligibility for a position 
of trust. Eligibility for a position of trust is denied. 
 
 
_____________________ 
Marc E. Curry 
Administrative Judge