An estimated 83,000 Department of Defense employees and contractors with security clearances had a collected unpaid federal tax debt of more than $730 million as of June 2012, according to a new report by the Government Accountability Office.

The report highlights concerns that workers with access to classified information could become targets by foreign intelligence if they have financial troubles. While federal law doesn’t prevent a person with tax debt from being granted a security clearance, security clearance guidelines warn about it. “An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds,” the regulations say.

“Federal laws do not prohibit an individual with unpaid federal taxes from holding a security clearance, but delinquent tax debt poses a potential vulnerability,” the report states.

Those who grant security clearances are supposed to weigh that risk, including tax debt, when granting security clearances. Plus, the security clearance questionnaire, which is 120 pages long, asks if an applicant has any financial problems that might cause a security vulnerability, including tax debts. Lying on the application could mean up to five years in prison.

“The GAO findings should raise the alarms,” said Evan Lesser, founder and managing director of “As government scrambles to find the next insider threat, history tells us that security-cleared individuals in financial trouble are the most vulnerable to coercion.”

Breaking down the numbers

An estimated 3.2 military employees and contractors were approved for security clearances from 2006 to 2011, the time frame of the analysis. Of the tax debtors, 44,500 were federal employees who owed approximately $363 million and the remainder were either federal contractors or registered as “other”. An estimated 3.2 million civilian and military employees, as well contractors, had clearances.

About 4,800 of the 83,000 employees had IRS liens against their property, and 23,000 were subject to wage garnishment and other IRS collection tactics.

“It is astonishing that there were so many cleared persons who owe so much,” said Steven Aftergood, director of the Project on Government Secrecy at the Federation of American Scientists. “One would expect the security clearance population to be more law abiding on average than the general public.”

Nearly 40 percent, or 34,000 individuals who owe money to the IRS, have a repayment plan in place for a combined total tax debt of $262 million. About 25 percent of those with tax debt were eligible for a top-secret or SCI clearance.

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Chandler Harris is a freelance business and technology writer located in Silicon Valley. He has written for numerous publications including Entrepreneur, InformationWeek, San Jose Magazine, Government Technology, Public CIO,, U.S. Banker, Digital Communities Magazine, Converge Magazine, Surfer's Journal, Adventure Sports Magazine,, and the San Jose Business Journal. Chandler is also engaged in helping companies further their content marketing needs through content strategy, optimization and creation, as well as blogging and social media platforms. When he's not writing, Chandler enjoys his beach haunt of Santa Cruz where he rides roller coasters with his son, surfs and bikes across mountain ranges.