Security Clearance Lawyer – Guideline F: Failure To File Taxes

What is Guideline F?

Guideline F is from the National Security Adjudicative Guidelines (Security Executive Agent Directive 4 of 8 June 2017). Guideline F concerns are "Financial Considerations."

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The Failure to file State and Federal Taxes.

The failure to file taxes or to files those taxes on-time raises the Guideline F concern because it demonstrates an unwillingness to abide by rules and regulations.

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Impact on Security Clearance

Tax Issues always raise red flags during a security clearance investigation and must be resolved prior to any favorable adjudication.

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How can I resolve tax issues so that I obtain a security clearance?

Generally, filing all past due tax returns and paying any past due taxes (or establishing a payment plan with a record of making on-time payments) is a good start. However, it will take more than just correcting the past failures to file to obtain a favorable security clearance adjudication.

Can Korody Law help me obtain my security clearance?

Korody Law’s success rate in its security clearance cases is extremely high.  We focus on representation of servicemembers, civil service employees, and government contractors before the Defense Office of Hearings and Appeals and the Personal Security Appeals Board (PSAB).  Our representation normally begins when the applicant for the security clearance receives a Letter of Intent to Deny, Letter of Intent to Revoke, or Statement of Reasons (SOR) from the Department of Defense Central Adjudications Facility (DoD CAF).  These notices inform the applicant that an initial determination has been made that the security clearance will not be granted and starts the due process procedures that must be given to the applicant before a final decision on the clearance is made.

Korody Law recently handled a defense contractor case where the applicant failed to file his federal taxes for 5 years prior to his application for his security clearance.  An SOR was issues for the failure to file the taxes, even though the applicant had reported as much on his SF-86 (EQIP) security clearance application and disclosed it to the investigator.  After speaking with the investigator, the applicant made a good faith effort to file all tax returns and pay any owed taxes.  Indeed, by the time the SOR was issued, he had provided evidence to the DoD CAF that he had resolved 4 of 5 tax years and had filed the last outstanding year.  But, as mentioned above, filing all tax returns does not, alone, resolve the Guideline F concern.  The Guideline F concern focuses not only on the financial issues (or tax issues) but also the reasons, judgment, and choices behind the failure to file in the first place.  As a general rule, security clearance judges do not give a tremendous amount of weight to remedial actions taken after an applicant is notified during the security clearance process of an issue.  Rather, it is the reliability, trustworthiness, and judgment of the individual overall that matters.

In our case above, Korody Law was able to present a comprehensive case that demonstrated to the security clearance judge that the disqualifying factors (failure to file taxes 5 of 6 years) were aberrations in the applicant’s character and that mitigating circumstances supported granting the clearance.  The result was a favorable decision granting the clearance.  Though this security clearance decision has not been publicly released yet, a prior decision involving failure to file tax returns handled by Korody Law can be found here.

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