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       DEPARTMENT OF DEFENSE 
   DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
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[NAME REDACTED] )       ISCR Case No. 18-01528 
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Applicant for Security Clearance ) 
Appearances 
For Government: Aubrey DeAngelis, Esq., Department Counsel 
For Applicant: Pro se 
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Decision 
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MALONE, Matthew E., Administrative Judge: 
Applicant presented sufficient information to mitigate the security concerns about 
her unpaid taxes and other financial problems. Her request for continued security 
clearance eligibility is granted. 
Statement of the Case 
On March 2, 2017, Applicant submitted an Electronic Questionnaire for 
Investigations Processing (e-QIP) to obtain eligibility for a security clearance required for 
her employment with a federal contractor. Based on the results of the ensuing background 
investigation, adjudicators for the Department of Defense (DOD) could not determine that 
03/18/2019
 
 
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it is clearly consistent with the interests of national security for Applicant to have a security 
clearance.1 
 
 On September 13, 2018, DOD issued a Statement of Reasons (SOR) alleging 
facts that raise security concerns under the adjudicative guideline for financial 
considerations (Guideline F). Applicant timely responded to the SOR (Answer) and 
requested a hearing.  
 
 I received the case on November 8, 2018, and convened the requested hearing 
on, December 13, 2018. The parties appeared as scheduled. Department Counsel 
proffered Government Exhibits (GX) 1 – 8. Applicant testified and proffered 37 documents 
collectively as Applicant Exhibit (AX) A. All exhibits were admitted, although Applicant 
objected to GX 2 – 4 on grounds that the information was old or required updating. For 
reasons stated at the hearing,2 I overruled her objections and admitted those exhibits 
along with all other exhibits to which there were no objections. I received a transcript of 
the hearing (Tr.) on January 2, 2019. 
 
Findings of Fact 
 
 Under Guideline F, the Government alleged Applicant failed to timely file her 
federal income tax returns for the tax years 2012 through 2016 (SOR 1.a) and her state 
income tax returns for the tax years 2014 through 2016 (SOR 1.e). It was further alleged 
that Applicant owed a total of $35,117 in past-due federal income taxes for tax years 2015 
through 2017 (SOR 1.b – 1.c), and that she owed $11,271 in past-due income taxes to 
State A (SOR 1.f) and $6,941 in past-due income taxes to State B (SOR 1.g). Finally, the 
Government alleged that Applicant owed two unpaid medical debts (SOR 1.h and 1.i) 
totaling $481, and $139 for an unpaid music store account (SOR 1.j). 
 
 In response to the SOR, Applicant admitted each allegation and provided 
extensive information about related financial and personal circumstances, as well as 
information about actions to correct her financial problems. (Answer) In addition to the 
facts thus established, I make the following additional findings of fact. 
 
 Applicant is 46 years old. Since February 2017, she has worked as a technical 
writer for a defense contractor. In May 2000, Applicant graduated from college with a 
degree in mathematics. While in college, she amassed an impressive academic record 
that led to an internship with a large information technology company. She also is a 
member of a prestigious engineering society. After graduating, she worked until 2004 for 
another large technology firm, but none of her work was related to the defense industry. 
This is her first request for a security clearance. (GX 1; Tr. 6 – 7, 15 – 16) 
 
                                                 
1 Required by Executive Order 10865, as amended, and by DOD Directive 5220.6 (Directive), as amended. 
 
2 Tr. 22 – 31. 
 
 
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 Applicant and her husband, a software engineer, have been married since March 
2003. They have two children, now ages 12 and 14. In 2004, when their older child was 
born, Applicant left the workforce to raise their children as a stay-at-home mother. Aside 
from a brief foray into self-employment in a childcare-related business, Applicant did not 
earn income between 2004 and 2017, and self-employment did not result in reportable 
income. (Answer; GX 1; GX 2; AX A; Tr. 16, 44 – 45, 54) 
 
 Applicant and her husband lived in State A until March 2016. They still own the 
house they lived in there, and they have been trying unsuccessfully to sell it since moving 
to State B. The housing market where they lived in State B is still depressed. They moved 
to State B after Applicant’s husband, who had been unemployed since October 2015, 
found work in State B. (Answer; GX 1; GX 2; AX A; Tr. 45, 50) 
 
 While Applicant was raising their children, she relied on her husband to manage 
their finances. This included filing and paying their state and federal income taxes. Their 
finances began to suffer after he lost his job in 2015. Additionally, they had been the 
primary caregiver for Applicant’s mother after she was diagnosed with a terminal illness 
in 2007 until her death in 2012. Not only did this result in additional medical and other 
expenses, it disrupted and stressed their home life. Also, in 2011, the mortgage for 
Applicant’s house in State A increased unexpectedly. Applicant and her husband 
obtained a mortgage modification the following year after struggling to make their new 
payments. Their mortgage is again in good standing. Through a combination of household 
stress over their debts and lack of income, and an erroneous assumption that they did 
not have to file income tax returns when they were not bringing in any income, Applicant’s 
husband did not file their federal income tax returns as alleged in SOR 1.a or their state 
income tax returns as alleged in SOR 1.e. Applicant’s husband submitted a letter attesting 
to his failure to file their returns as required. As it turns out, they were correct as to their 
State A returns for 2016, because they spent most of that tax year in State B. (Answer; 
GX 1; GX 2; GX 8; AX A; Tr. 16 – 20, 46 – 48) 
 
 In her e-QIP, Applicant disclosed in great detail her tax and other financial 
difficulties. Shortly thereafter, she began the process of filing her past-due returns and 
paying her taxes and other debts. To date, Applicant has paid the debts at SOR 1.h – 1.j. 
She also has filed all of her tax returns. Available information shows she has established 
a repayment plan for her federal taxes, through which she has paid $300 each month 
since August 2018. As for her state taxes, her State A debt has been reduced by about 
40 percent from $11,271 to $6,683. She also has established, and is adhering to a 
repayment plan for her State B taxes that will resolve that debt by 2021. (GX 1; GX 2; GX 
5 – 7; AX A; Tr. 36 – 43) 
 
 Applicant took over management of the household finances in early 2017. In 
addition to her efforts to file past-due tax returns and repay their taxes, she obtained from 
her husband a limited power of attorney in order to access his tax records and other 
financial information; she sought assistance from a financial counseling firm; and she 
used the services of a certified public accountant in resolving their tax status. Currently, 
 
 
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Applicant and her husband are sound financially. They have been able to stay current on 
their State A mortgage while paying the debts listed in the SOR. They currently earn about 
$180,000 annually combined. Their cash on hand each month after paying their debts 
and other regular obligations is sufficient to guard against unexpected events. (Answer; 
AX A; Tr. 38, 48 – 55, 58) 
 
Policies 
 
 Each security clearance decision must be a fair, impartial, and commonsense 
determination based on examination of all available relevant and material information,3 
and consideration of the pertinent criteria and adjudication policy in the adjudicative 
guidelines (AG).4 Decisions must also reflect consideration of the factors listed in ¶ 2(d) 
of the guidelines. Commonly referred to as the “whole-person” concept, those factors are:  
 
  (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. 
 
 The presence or absence of a disqualifying or mitigating condition is not 
determinative of a conclusion for or against an applicant. However, specific applicable 
guidelines should be followed whenever a case can be measured against them as they 
represent policy guidance governing the grant or denial of access to classified 
information. A security clearance decision is intended only to resolve whether it is clearly 
consistent with the national interest5 for an applicant to either receive or continue to have 
access to classified information.  
 
 The Government bears the initial burden of producing admissible information on 
which it based the preliminary decision to deny or revoke a security clearance for an 
applicant. Additionally, the Government must be able to prove controverted facts alleged 
in the SOR. If the Government meets its burden, it then falls to the applicant to refute, 
extenuate or mitigate the Government’s case. Because no one has a “right” to a security 
clearance, an applicant bears a heavy burden of persuasion.6 A person who has access 
                                                 
3 See Directive. 6.3. 
 
4 The current adjudicative guidelines were issued by the Director of National Intelligence on December 10, 
2016, to be effective for all adjudications on or after June 8, 2017. 
 
5 See Department of the Navy v. Egan, 484 U.S. 518 (1988). 
 
6 See Egan, 484 U.S. at 528, 531. 
 
 
 
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to classified information enters into a fiduciary relationship with the Government based 
on trust and confidence. Thus, the Government has a compelling interest in ensuring each 
applicant possesses the requisite judgment, reliability and trustworthiness of one who will 
protect the national interests as his or her own. The “clearly consistent with the national 
interest” standard compels resolution of any reasonable doubt about an applicant’s 
suitability for access in favor of the Government.7 
 
Analysis 
 
Financial Considerations  
 
 The Government established Applicant failed to file her state and federal income 
tax returns as required, and that she incurred the delinquent tax and other debts alleged 
in the SOR. That information reasonably raised a security concern about Applicant’s 
finances that is articulated at AG ¶ 18: 
 
Failure to live within one's means, satisfy debts, and meet financial 
obligations may indicate poor self-control, lack of judgment, or 
unwillingness to abide by rules and regulations, all of which can raise 
questions about an individual's reliability, trustworthiness, and ability to 
protect classified or sensitive information. Financial distress can also be 
caused or exacerbated by, and thus can be a possible indicator of, other 
issues of personnel security concern such as excessive gambling, mental 
health conditions, substance misuse, or alcohol abuse or dependence. An 
individual who is financially overextended is at greater risk of having to 
engage in illegal or otherwise questionable acts to generate funds. 
Affluence that cannot be explained by known sources of income is also a 
security concern insofar as it may result from criminal activity, including 
espionage. 
 
More specifically, available information supported application of the disqualifying 
conditions at AG ¶¶ 19(a) (inability to satisfy debts); 19(c) (a history of not meeting 
financial obligations); and 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). 
 
By contrast, Applicant established that her debts arose from events and 
circumstances beyond her control that are not likely to recur. Applicant and her husband 
endured a combination of reduced income and unexpected expenses before moving to 
State B in 2016. Additionally, Applicant’s husband did not file their tax returns as required. 
Nonetheless, Applicant acted in a responsible manner under the circumstances. She now 
manages their household finances and has documented significant progress in resolving 
their tax and other debts. All of their returns are now filed, and she has established a 
                                                 
7 See Egan; AG ¶ 2(b). 
 
 
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reliable track record of repayment. She also has resolved her smaller, non-tax debts and 
has sufficient funds remaining each month with which to avoid any future financial 
adversity. Finally, Applicant has not incurred any new delinquencies, and the record does 
not show that her financial problems were caused by poor decision making, irresponsible 
spending, or misconduct on her part. 
 
All of the foregoing supports application of the following AG ¶ 20 mitigating 
conditions: 
  
(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 and/or 
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. 
 
 On balance, I conclude the record as a whole is sufficient to mitigate the security 
concerns raised by the Government’s information about Applicant’s finances. 
 
I also have evaluated this record in the context of the whole-person factors listed 
in AG ¶ 2(d). Particularly noteworthy is the information regarding Applicant’s response to 
adverse financial circumstances. It reflects well on Applicant’s judgment and reliability. A 
fair and commonsense assessment of the record evidence as a whole shows the security 
concerns about his finances are mitigated. 
 
Formal Findings 
 
 Formal findings 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 
 
 
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Subparagraphs 1.a - 1.j:  For Applicant 
 
Conclusion 
 
 In light of all of the foregoing, it is clearly consistent with the interests of national 
security for Applicant to have access to classified information. Applicant’s request for a 
security clearance is granted. 
 
 
 
                                        
MATTHEW E. MALONE 
Administrative Judge