Recently released statistics confirm that, once again, financial issues constituted the top reason for security clearance denials in 2017. And it wasn’t even a close call; financial cases outpaced the next closest category (Personal Conduct) at a rate of nearly 4 to 1.

Within the financial category is a predominant sub-set: people who are delinquent in filing their income tax returns and/or paying back taxes. The “and/or” is the key element here. It is entirely possible to have one’s security clearance denied for late filing of tax returns even if the filer owed no money or ultimately claimed a refund. I’ve seen it happen multiple times.

Why Unfiled Taxes Could Result in Clearance Denial (Even if the Government Owes You Money)

The logic behind this perplexes many people. After all, why does the government care when you choose to claim your refund? Doesn’t the government actually come out ahead by keeping your money on deposit for longer (thereby earning additional interest and the benefit of use)? The answer to the latter is clearly “yes”, but that’s not the issue as personnel security officials see it. Rather, the government’s argument in these cases essentially boils down to this: “If you can’t be trusted to comply in a timely manner with your filing obligation, you can’t be trusted to follow security rules and regulations that require similar diligence.”

Personally, I tend to think this argument somewhat specious in cases where the late filing deprives the government of no revenue. Nonetheless, an obligation is an obligation and, absent compelling circumstances and evidence of reformation, these cases are challenging to win.

Of course, every case is also slightly different. Persistent tax scofflaws aren’t going to get much sympathy from the government, nor is timely filing for just one year typically sufficient to reform a lengthy history of non-compliance. On the other hand, in cases of just a couple years’ late filing, requesting an extension of time to file from the IRS (and thus technically not filing “late” if within the extension period) can sometimes mean the difference between a security clearance revocation and a second chance.

If you fall into this potentially borderline category, you’ll need to contact the IRS and request an extension of time to file prior to Tax Day (this year, Tuesday, April 17, 2018). The 6-month extension available in most cases is called “automatic,” but that is quite the misnomer: you still have to request it.

You can request the “automatic” extension quickly and easily here. But when in doubt, contact a certified tax professional such as an accountant, enrolled agent, or tax attorney.


This article is intended as general information only and should not be construed as legal advice. Consult an attorney regarding your specific situation. 

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Sean M. Bigley retired from the practice of law in 2023, after a decade representing clients in the security clearance process. He was previously an investigator for the Defense Counterintelligence and Security Agency (then-U.S. Office of Personnel Management) and served from 2020-2024 as a presidentially-appointed member of the National Security Education Board. For security clearance assistance, readers may wish to consider Attorney John Berry, who is available to advise and represent clients in all phases of the security clearance process, including pre-application counseling, denials, revocations, and appeals. Mr. Berry can be found at