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        DEPARTMENT OF DEFENSE 
  DEFENSE OFFICE OF HEARINGS AND APPEALS 
In the matter of: )
)
) ISCR Case No: 18-01788 
) 
Applicant for Security Clearance ) 
For Government: Nicholas Temple, Esq., Department Counsel 
For Applicant: Pro se 
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Decision 
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DAM, Shari, Administrative Judge: 
Applicant failed to responsibly resolve a 2012 Federal tax lien. He did not mitigate 
the resulting financial security concerns. National security eligibility for access to 
classified information is denied. 
Statement of the Case 
On August 27, 2018, the Department of Defense (DOD) issued to Applicant a 
Statement of Reasons (SOR) detailing security concerns under Guideline F (Financial 
Considerations). The action was taken 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 National Security Adjudicative Guidelines for 
Determining Eligibility for Access to Classified Information or Eligibility to Hold a Sensitive 
Position (AG) effective within the DOD on June 8, 2017.  
Applicant answered the SOR in writing on October 1, 2018, and requested a 
hearing before an administrative judge (Answer). The Defense Office of Hearings and 
Appeals (DOHA) assigned the case to me on February 7, 2019. DOHA issued a Notice 
04/30/2019
 
 
 
 
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of Hearing on February 12, 2018, setting the hearing for February 27, 2019. The hearing 
was held as scheduled.  
 
 During the hearing, Department Counsel offered five exhibits. Applicant did not 
object to the Department’s exhibits, or offer any exhibits. The Department’s exhibits were 
admitted into evidence. The record remained open until March 18, 2019, to give Applicant 
an opportunity to submit additional documents.1 Applicant timely provided exhibits that I 
marked as Applicant Exhibit (AE) A through I and admitted into the record without 
objection. DOHA received the hearing transcript (Tr.) on March 11, 2019.  
 
Findings of Fact 
 
 In his Answer, Applicant admitted the sole allegation contained in the SOR and 
provided an explanation for the debt. (Answer)  
 
 Applicant is 43 years old and divorced since 2004. He and his former wife have 
two children, ages 20 and 16. He has joint custody and provides financial support for the 
children. He attended college between 1996 and 1997. He enlisted in the Army in June 
1997 and served until he was honorably discharged in June 2000, as an E-4. He held a 
security clearance while serving. While serving, he was awarded soldier of the month. 
(Tr. 16-17; GE 1, GE 5; AE B)  
 
 In March 2017, Applicant submitted an electronic Questionnaires for Investigations 
Processing (e-QIP). He listed full employment from January 2001 until April 2016. He 
disclosed that he failed to file or pay Federal and state tax returns for tax year 2009. He 
estimated that he owed about $13,000. He stated that he had an installment agreement 
with the Internal Revenue Service (IRS) to pay the debt while he was employed. However, 
after being laid off in April 2016, he was unable to make the payments. He further 
disclosed that he was filing an Unable to Pay Status form with the IRS. He stated that he 
had joined a credit repair service to improve his credit score. (GE 1) 
 
 In February 2018, a government investigator interviewed Applicant about the 
background information he provided in his e-QIP. During the interview, the investigator 
informed Applicant that the IRS had filed a $17,003 lien against him in May 2012.2 
Applicant agreed, and said that the tax debt was the same debt he disclosed in his e-QIP. 
Applicant stated that the debt’s balance was $13,000 because he had been making 
monthly payments of $500, until he lost his job in April 2016. (GE 5) He did not provide a 
document confirming that balance. 
 
                                            
1Per my request, Applicant agreed to submit the following information: the initial amount of the IRS tax lien 
filed in May 2012; the tax years included in that lien; and the current balance owed on that tax lien. (Tr. 33, 
40)   
 
 2Applicant testified that this lien may have been over $20,000 at some point. (Tr. 32)  
 
 
 
 
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 Applicant worked full-time from January 2001 to April 2016, at which time he was 
laid off. (GE 1) He was then unemployed until about August 2017 when he took a position 
as a truck driver. He worked for two months and left in October 2017 to find a better 
paying position. He remained unemployed until he started a position in February 2019. 
(Tr. 24; GE 5)  
 
 Applicant stated his tax problem began after he and his wife divorced in 2004, 
which created some tax confusion. In 2009, he hired a tax consultant to prepare his tax 
returns for years 2006 through 2009. After retrieving his returns from the consultant, he 
did not review the prepared returns or other documents, and instead mailed the sealed 
envelope directly to the IRS. The IRS audited him and filed a lien against him in May 2012 
for about $17,000. That lien remains unpaid and represents monies owed for those years 
three years and possibly more. (Tr. 19-24)  
 
  Applicant admitted that he failed to timely file his Federal 2010 and 2011 income 
tax returns, and he may owe taxes for those years as part of the 2012 lien. (Tr. 19-24) He 
said he timely filed his 2012, 2013, 2014, and 2015 Federal taxes. (Tr. 28)  
 
 Applicant testified he filed his Federal income tax returns for 2016, 2017, and 2018, 
on February 27, 2019, the day before his hearing. 3  (Tr.23, 28). He believes he will receive 
a tax refund of about $7,285 for 2016 and 2017. He said that refund will be applied to the 
outstanding IRS lien. (Tr. 30-31) He stated that he did not file those returns sooner 
because he was unable to prepare them himself and he could not afford to hire a tax 
consultant or pay any outstanding taxes. (Tr. 29)  
  
 Applicant stated he initially entered into a payment plan with the IRS to resolve the 
2012 lien either in 2012 or 2013 and began making monthly payments of about $560. He 
said he made those payments until he was laid off in April 2016. (Tr. 26) His tax exhibits 
do not confirm that he consistently made payments over those years. There is evidence 
that he made monthly installment payments as follows: $100 in September, October, and 
December 2010; $100 in January, March, and April 20114; $376 in March, April, and June 
2013; $386 in July through December 2014; $386 from January through October 2015; 
and $386 in January, February, and March 2016. (AE C through G)  
  
 Applicant thinks he initially owed the IRS about $20,000. (Tr. 32-33) He said he 
filed all of his state income returns. He does not believe that he owes the state unpaid 
taxes because he has not received communication from it regarding the matter. (Tr. 35-
36)  
  
                                            
3The SOR did not allege security concerns related to the late filing of Applicant’s Federal tax returns for 
2010, 2011, 2016, and 2017. Those derogatory facts will not be considered in analyzing pertinent 
disqualifying conditions. They may be considered in assessing Applicant’s credibility, and analyzing 
mitigating conditions and the whole-person concept.  
 
4There is no information in this record pertinent to any installment agreement on which Applicant was 
making payments in 2010 and 2011, prior to the filing of the 2012 lien. 
 
 
 
 
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 Applicant submitted a budget based on his new job. His annual salary is about 
$72,592. His net monthly pay is $3,600 and expenses are $2,435. He established another 
payment plan with the IRS in March 2018 to address the outstanding lien. It is scheduled 
to start on May 5, 2019, and requires a $346 monthly payment. Applicant included the 
payment in his monthly expenses. (Tr. 29; AE B, AE I) 
 
Policies 
 
 When evaluating an applicant’s suitability for national security eligibility, the 
administrative judge must consider the AG. In addition to brief introductory explanations 
for each guideline, the AG list potentially disqualifying and mitigating conditions, which 
are useful 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s 
overarching adjudicative goal is a fair, impartial, and commonsense decision. According 
to AG ¶ 2(c), 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. Likewise, I have avoided drawing inferences grounded on mere 
speculation or conjecture. 
 
Directive ¶ E3.1.14 requires the Government to present evidence to establish 
controverted facts alleged in the SOR. Directive ¶ E3.1.15 states that an “applicant is 
responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or 
mitigate facts admitted by the applicant or proven by Department Counsel, and has the 
ultimate burden of persuasion as to obtaining a favorable clearance 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 protect or safeguard classified 
information. Such decisions entail a certain degree of legally permissible extrapolation as 
to potential, rather than actual, risk of compromise of classified information.  
 
Section 7 of Executive Order 10865 provides that an adverse decision shall be “in 
terms of the national interest and shall in no sense be a determination as to the loyalty of 
 
 
 
 
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the applicant concerned.” See also Executive Order 12968, Section 3.1(b) (listing multiple 
prerequisites for access to classified or sensitive information.) 
 
Analysis 
 
Guideline F: Financial Considerations 
 
The security concerns relating to the guideline for financial considerations are 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 information. Financial distress can also be caused by 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 acts to generate funds.  
 
AG ¶ 19 sets out disqualifying conditions that could potentially raise security 
concerns. Three are potentially applicable in this case: 
 
(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 tax as 
required. 
 
In May 2012, the IRS filed a tax lien against Applicant for over $17,000. Applicant 
thinks it included unpaid taxes for tax years 2006 to 2009, and possibly subsequent tax 
years. The debt is not resolved. The evidence is sufficient to raise the above disqualifying 
conditions. 
 
After the Government produced substantial evidence of the disqualifying 
conditions, the burden shifted to Applicant to produce evidence and prove mitigation of 
the security concerns. AG ¶ 20 sets out four conditions that could potentially mitigate 
financial security concerns under this guideline: 
(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; 
 
 
 
 
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(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 individual has received or is receiving financial 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; 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 2012 tax lien remains unresolved and ongoing. AG ¶ 20(a) does not 
apply. There is some evidence that Applicant’s initial tax problem may have arisen as a 
consequence of his 2004 divorce. However, two years after the divorce he failed to file 
and pay taxes for years 2006 through 2009, and later. Those years were within his control. 
He was fully employed from January 2001 until April 2016, when he was laid off, which 
was a circumstance beyond his control. He subsequently obtained a job in 2017 that he 
quit after working two months. From 2010 into 2016, he attempted to manage his IRS 
debts through payment plans. However, those payments were inconsistent. The evidence 
establishes minimal mitigation under AG ¶ 20(b).  
 
Applicant hired a credit repair company to improve his credit score. It is unknown 
if that company also provided credit counseling. Although he recently initiated a payment 
plan with the IRS, the evidence is insufficient to conclude that his tax problems are under 
control or that he is in compliance with the new repayment agreement. The evidence 
establishes minimal mitigation under AG ¶¶ 20(c) and 20(g).   
 
Whole-Person Concept 
 
 Under the whole-person concept, the 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. 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. 
 
 
 
 
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Under AG ¶ 2(c), the ultimate determination of whether to grant national security eligibility 
must include an overall commonsense 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 
facts and circumstances surrounding this case. I have incorporated my comments under 
Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were 
addressed under that guideline, but some warrant additional comment. 
 
Applicant is a 43-year-old man, who honorably served in the Army for three years. 
He has a history of Federal tax problems, which began in 2006 and continued into 2012 
or 2013 when he began addressing a tax lien for unpaid paid taxes for prior years. He 
admitted that he failed to timely file his 2010 and 2011 Federal tax returns, and his 2016 
and 2017 Federal tax returns, which he filed the day before his hearing. A month after his 
hearing, he arranged another repayment plan with the IRS to resolve the outstanding 
debt. It starts in May 2019. He agreed to submit information from the IRS documenting 
the initial amount of the lien, the years included in it, and the current balance of the lien, 
but did not do so. The record does not contain sufficient information to clarify the status 
of his Federal taxes. 
 
Applicant has not established a sufficient record of responsibly managing his 
taxes. He has not made a payment to the IRS for three years. His history of non-
compliance with a fundamental legal obligation to timely file tax returns and pay tax debts 
raises security concerns. The DOHA Appeal Board has held that:  
 
Failure to file tax returns suggests that an applicant has a problem with 
complying with well-established government rules and systems. Voluntary 
compliance with these things is essential for protecting classified 
information. ISCR Case No. 14-04437 at 3 (App. Bd. Apr. 15, 2016). 
Someone 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).5  
   
The record evidence leaves me with doubts as to Applicant’s judgment and 
suitability for a security clearance. Applicant failed to mitigate the security concerns 
arising under the financial considerations guideline.  
 
 
 
 
 
                                            
5 ISCR Case No. 12-10933 at 3 (App. Bd. June 29, 2016). 
 
 
 
 
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Formal Findings 
 
 Formal findings for or against Applicant on the allegations set forth in the SOR, as 
required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: 
 
Paragraph 1, Guideline F:        AGAINST APPLICANT 
 
   Subparagraph 1.a:      Against Applicant 
   
Conclusion 
 
 In light of all of the circumstances presented by the record in this case, it is not 
clearly consistent with the national interest to grant Applicant a security clearance. 
National security eligibility for access to classified information is denied. 
 
                                            
   
_________________ 
SHARI DAM 
Administrative Judge