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DEPARTMENT OF DEFENSE 
DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
[REDACTED] ) ISCR Case No. 18-01256   
) 
Applicant for Security Clearance ) 
Appearances 
For Government: Alison O’Connell, Esq., Department Counsel 
For Applicant: Pro se 
______________ 
Decision 
______________ 
HESS, Stephanie C., Administrative Judge: 
Applicant did not mitigate the security concerns raised by her delinquent taxes and 
other debts under Guideline F (Financial Considerations). Access to classified information 
is denied. 
Statement of the Case 
Applicant submitted a security clearance application (e-QIP) on November 22, 
2016. On July 3, 2018, the Department of Defense (DOD) sent her a Statement of 
Reasons (SOR), alleging security concerns under Guideline F. The DOD acted under 
Executive Order (E.O.) 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 (AG) implemented by DOD on June 8, 2017.  
Applicant answered the SOR on August 4, 2018, and requested a decision on the 
record without a hearing. Department Counsel submitted the Government’s written case 
on November 1, 2018. On November 2, 2018, a complete copy of the file of relevant 
material (FORM,) which included Government Exhibits (GX) 1 through 12, was sent to 
Applicant, who was given an opportunity to file objections and submit material to refute, 
extenuate, or mitigate the Government’s evidence. She received the FORM on December 
03/06/2019
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4, 2018, and filed a Response within the allotted 30 days. The case was assigned to me 
on January 30, 2019.  
 
Findings of Fact 
 
Under Guideline F, the SOR alleges that Applicant has 21 delinquent accounts 
totaling $19,102, is indebted to the Federal Government for a 2011 tax lien of $1,570 and 
for a 2010 tax lien of $15,331, and that she failed to timely file her Federal tax returns for 
2010, 2011, and 2016. The total alleged delinquent debt is $36,003. Applicant admits 12 
of the SOR debts totaling $19,777, and to failing to timely file her tax returns. She denies 
all other allegations. The delinquent debts are reflected in Applicant’s credit bureau 
reports (CBR) from April 2018 and March 2017, and discussed on her e-QIP, and in her 
responses to Interrogatories, which include the summary of her personal subject interview 
(PSI). (GX 6; GX 7; GX 4; GX 5.) Applicant’s admissions are incorporated in my findings 
of fact.   
 
Applicant is a 42-year-old curriculum director currently working a civilian supporting 
a branch of the U.S. military. From 2014 until 2016, she was employed as a civilian for 
another branch of the U.S. military. She was granted her first security clearance at some 
point during that employment. She completed her bachelor’s degree in 2007, and 
university-level certification in 2009. She married in 2006 and divorced in 2010. She has 
one adult daughter. (GX 4.)  
 
In her Answer, Applicant states, without specificity, that she began having financial 
difficulties in 1999. However, Applicant identifies 2007 as a year that her ongoing financial 
problems arose. Applicant graduated from college, and was employed by a state agency 
as a social worker. Applicant was passionate about her work, but due to her 
compensation, she classifies the job as underemployment. That same year, Applicant 
unexpectedly gained custody of her friend’s daughter, then 11 years old. Becoming a 
sudden parent of a young girl who was then experiencing emotional upheaval had a 
significant impact on Applicant’s personal life. It also necessarily created additional strains 
on Applicant’s already-stretched finances, including counseling-related costs and 
unanticipated medical costs. Applicant and her husband divorced in 2010, and Applicant 
has remained a single parent. (GX 3.)  
 
From 2007 forward, Applicant struggled financially, with some periods being more 
difficult than others. Applicant also stated that that she has not always made the best 
financial decisions. (Response; GX 3.) In 2016, she was also personally and financially 
overwhelmed by having to care for her father during his terminal illness, which resulted in 
many hours of long-distance commuting and the associated costs, as well as causing her 
to leave graduate school before completing her coursework. (GX 3; GX 6.) 
 
As a result of the onset of her financial difficulties, in 2007, Applicant was unable 
to timely pay her 2006 tax-year obligation. During her PSI in April 2017, Applicant stated 
that she owed the IRS approximately $8,000, was repaying the debt annually by having 
her tax refund withheld and applied to her tax debts, and did not know when she would 
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satisfy the debt. She further stated that although she owed an outstanding balance, she 
had regularly filed her tax returns. (GX 5.)  
 
Applicant provided a copy of a letter to the IRS from May 2017 in which she stated 
her intention to resolve any outstanding taxes, and requested information about the IRS’s 
liens. However, the letter does not contain a mailing address, nor does it contain 
Applicant’s Social Security number or other taxpayer identification information. In 2018, 
Applicant contacted the IRS and requested an installment agreement for unpaid taxes 
from 2008, 2009, 2012, and 2014. The IRS responded by letter, stating that it could not 
consider an installment agreement because it had not received Applicant’s return for 
2016. There is a handwritten notation by Applicant on the IRS’s letter stating that the tax 
returns have been filed, but she did not provide any corroborating evidence. (GX 5.)  
 
Applicant’s May 23, 2018, IRS transcripts for tax years 2009 through 2017 show 
that Applicant owes $15,983 in past-due taxes, interest, and penalties for tax years 2008, 
2009, 2012, and 2014. The transcripts state that Applicant has not filed a return for 2010 
or 2016, and there is simply no record relating to 2011 in the transcript. The transcript 
also shows that Applicant filed her 2017 return on May 7, 2018, and indicates that 
Applicant had a $1,829 tax liability for 2017. (GX 5.) The 2010 $15,331 (SOR ¶ 1.m) and 
the $1,570 2011 (SOR ¶ 1.n) tax liens do not appear on the transcript, but remain unpaid 
as of April 2018. (GX 6.)  
 
However, Applicant submitted pages 3 and 5 of a five-page document from the 
IRS to her regarding her 2016 tax return. Specifically, page 3 states that Applicant owes 
an additional $3,217 for her 2016 taxes. The document states that Applicant is required 
to pay this amount by August 6, 2018, to avoid penalties and interest charges. The 
document lists a failure-to-file penalty of $610 and shows that the IRS received the return 
on September 15, 2017. (GX 3.) There is no evidence that Applicant paid the $3,217 of 
past-due taxes.  
 
In her Answer, Applicant does not deny the tax liens alleged in SOR ¶¶ 1.m and 
1.n, but does dispute owing the amounts alleged in the SOR. Applicant stated that she 
received a letter from the IRS showing a different balance owed, but not showing the 
liens. She further stated that she contacted the IRS requesting a current amount due on 
the liens. 
 
In May 2008, Applicant made a $10 payment each on the debts alleged in SOR ¶¶ 
1.a, 1.h, 1.l, and 1.k. In her Answer, Applicant stated that she had received repayment 
options from the creditor for SOR ¶ 1.a in August 2018; that she was waiting to hear from 
the creditor for SOR ¶ 1.b about repayment options; that she was trying to find the original 
creditor for the collection accounts for SOR ¶¶ 1.h and 1.i with the intent of entering into 
repayment agreements; and that she was entering into a repayment agreement with the 
creditors for SOR ¶¶ 1.j, 1.k, 1.l, 1.o, and 1.r. There is no record evidence that Applicant 
entered any repayment agreements with any of these SOR creditors. Applicant admits 
SOR ¶¶ 1.c and 1.d and has not taken any action on these debts. 
 
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Applicant disputed the debts alleged in SOR ¶¶ 1.e, 1.f, 1.g, 1.p, 1.q, 1.s through 
1.w with the three major credit reporting agencies. Applicant was told by a credit advisor 
to dispute the delinquent accounts in order to ascertain if the accounts were Applicant’s 
and were accurately reported. (Response.) However, there is no record evidence that any 
of these debts were successfully disputed or removed from her credit reports. 
 
Applicant has created and maintains a budget worksheet, and uses a credit-
monitoring application on her cell phone. Her credit score has recently improved by 22 
points. (GX 3.) Applicant’s April 2018 CBR shows no recently delinquent accounts. (GX 
6.) Applicant is active in her community, is a gubernatorial appointee, and has been 
officially recognized for her advocacy for the underserved. She is dedicated to her job 
and to supporting the United States. Her daughter has recently earned a master’s degree. 
(GX 3.) 
 
Policies 
 
 “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 
484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to 
“control access to information bearing on national security and to determine whether an 
individual is sufficiently trustworthy to have access to such information.” Id. at 527. The 
President has authorized the Secretary of Defense or his designee to grant applicants 
eligibility for access to classified information “only upon a finding that it is clearly 
consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified 
Information within Industry § 2 (Feb. 20, 1960), as amended.  
 
Eligibility for a security clearance is predicated upon the applicant’s meeting the 
criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, 
recognizing the complexities of human behavior, an administrative judge applies these 
guidelines in conjunction with an evaluation of the whole person. An administrative 
judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An 
administrative judge must consider all available and reliable information about the person, 
past and present, favorable and unfavorable. 
 
 The Government reposes a high degree of trust and confidence in persons with 
access to classified information. This relationship transcends normal duty hours and 
endures throughout off-duty hours. 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. 
 
Clearance decisions must be made “in terms of the national interest and shall in 
no sense be a determination as to the loyalty of the applicant concerned.”  See Exec. Or. 
10865 § 7. Thus, a decision to deny a security clearance is merely an indication the 
applicant has not met the strict guidelines the President and the Secretary of Defense 
have established for issuing a clearance. 
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 Initially, the Government must establish, by substantial evidence, conditions in the 
personal or professional history of the applicant that may disqualify the applicant from 
being eligible for access to classified information. The Government has the burden of 
establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. 
“Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. 
Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines 
presume a nexus or rational connection between proven conduct under any of the criteria 
listed therein and an applicant’s security suitability. See ISCR Case No. 15-01253 at 3, 
(App. Bd. Apr. 20, 2016).  
  
Once the Government establishes a disqualifying condition by substantial 
evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the 
facts. 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. Sep. 22, 2005).  
 
An applicant “has the ultimate burden of demonstrating that it is clearly consistent 
with the national interest to grant or continue his security clearance.” ISCR Case No. 01-
20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if 
they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b).  
 
Analysis 
 
Guideline F, Financial Considerations 
 
The concern under this guideline is set out 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. . . . An individual who is financially 
overextended is at risk of having to engage in illegal or otherwise 
questionable acts to generate funds. 
 
 This concern is broader than the possibility that an individual might knowingly 
compromise classified information in order to raise money. It encompasses concerns 
about an individual’s self-control, judgment, and other qualities essential to protecting 
classified information. An individual who is financially irresponsible may also be 
irresponsible, unconcerned, or negligent in handling and safeguarding classified 
information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 
  
 The record evidence establishes three disqualifying conditions under this 
guideline: AG ¶ 19(b) (“unwillingness to satisfy debts regardless of the ability to do so”), 
AG ¶ 19(c) (“a history of not meeting financial obligations”), and AG ¶ 19(f) (“failure to 
file… or pay annual Federal… income tax as required.)  
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 The following mitigating conditions are potentially applicable: 
 
AG ¶ 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;  
 
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(d): individual initiated and is adhering to a good-faith effort to repay 
overdue creditors or otherwise resolve debts;  
 
AG ¶ 20(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 
 
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. 
 
Applicant’s ongoing financial difficulties arose in 2007, due to conditions largely 
beyond her control. Specifically, she was underemployed and became the guardian of an 
11-year-old child with some emotional and health-related issues. Applicant fell behind on 
her financial obligations, and was unable to pay her 2006 taxes, which started a cycle of 
indebtedness to the IRS. The IRS entered tax liens against Applicant in 2010 and 2011. 
In 2018, Applicant contacted the IRS in an effort to enter an installment agreement for all 
back taxes due for tax years 2008 through 2017. The IRS denied her request because 
they had no record of her having filed her 2016 return. There is no documentary evidence 
that Applicant has filed all required returns, or that she has reached any type of agreement 
with the IRS. The known past-due taxes Applicant owes for tax years 2008 through 2015 
total $15,983. Applicant has not filed her 2010 and 2011 tax returns. The total tax liability 
for these years and for 2016 and 2017 is undetermined. Applicant has not satisfied the 
2010 and 2011 liens totaling $16,901. SOR ¶¶ 1.m, 1.n, and 1.x are not mitigated. 
 
Applicant stated that she intended to enter repayment agreements with a number 
of her creditors. She made $10 payments to four separate SOR creditors in May 2018. 
She also contacted several other creditors about repayment options, and, on the 
recommendation of a credit advisor, disputed 10 of the delinquent accounts. However, 
she has not taken any other action regarding the 21 delinquent SOR accounts which total 
approximately $19,000. “Good faith” means acting in a way that shows reasonableness, 
prudence, honesty, and adherence to duty or obligation. ISCR Case No. 99-0201, 1999 
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WL 1442346 at *4 (App. Bd. Oct. 12, 1999). While Applicant may have had a reasonable 
basis to dispute the legitimacy of her delinquent accounts, there is no documented proof 
substantiating the basis of the dispute, nor is there any evidence that any of the delinquent 
accounts have been resolved through the dispute process. None of the mitigating 
conditions apply to SOR ¶¶ 1.a through 1.l and 1.o through 1.w. 
 
Applicant’s financial issues are recent, ongoing, and unresolved. Her failure to 
timely file and pay her taxes as required by law and her failure to take reasonable action 
to resolve her financial obligations raise concerns about Applicant’s willingness to abide 
by rules and regulations, and raise questions about her reliability, trustworthiness, and 
good judgment. The financial considerations security concern is not mitigated 
 
Whole-Person Concept 
 
 Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a 
security clearance must be an overall commonsense judgment based upon careful 
consideration of the guidelines and the whole-person concept. In applying the whole-
person concept, an administrative judge must evaluate an applicant’s eligibility for a 
security clearance by considering the totality of the applicant’s conduct and all relevant 
circumstances. An administrative judge should consider the nine adjudicative process 
factors listed at AG ¶ 2:  
 
(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.  
 
 I have incorporated my comments under Guideline F in my whole-person analysis. 
Some of the factors in AG ¶ 2 were addressed under that guideline, but I have also 
considered the following: 
 
 Applicant has worked supporting the U.S. military for the past five years. She is 
dedicated to her job, her community, and her daughter. She is a recognized advocate for 
the underserved members of her community and a gubernatorial appointee. However, 
until she can get her finances under control, her delinquent taxes and other debts remain 
a concern.   
  
 After weighing the disqualifying and mitigating conditions under Guideline F, and 
evaluating all the evidence in the context of the whole person, I conclude Applicant has 
not mitigated the security concerns raised by her delinquent taxes and other debts. 
Accordingly, I conclude she has not carried her burden of showing that it is clearly 
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consistent with the national interest to grant her eligibility for access to classified 
information. 
 
Formal Findings 
 
As required by section E3.1.25 of Enclosure 3 of the Directive, I make the following 
formal findings on the allegations in the SOR: 
 
 Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT 
 
  Subparagraphs 1.a – 1.x:    Against Applicant 
   
Conclusion 
 
 I conclude that it is not clearly consistent with the national interest to grant 
Applicant’s eligibility for a security clearance. Eligibility for access to classified information 
is denied. 
 
 
 
Stephanie C. Hess 
Administrative Judge