We all hope for that long lost relative to die and leave us their estate in their wills – until we realize we have to figure out how to pay the estate taxes. One security clearance holder found himself running headlong into the issues of estate planning after his grandmother died in 2015 and the applicant and his brother were left dealing with her estate. The individual then found himself running headlong into a security clearance denial after the estate issues caused him to fail to pay his personal taxes for four years, and he was left with a Statement of Reasons (SOR) outlining why his financial issues were a reason for security clearance denial.

True or False: Failing to Pay Your Taxes for Four Years will Result in Clearance Denial

We talk frequently at ClearanceJobs that while financial issues are the top cause of security clearance denial or revocation, not all financial issues are created equally. And failing to pay taxes or fulfill financial obligations tied to federal rules and regulations is more likely to be considered an issue of reliability and trustworthiness than high consumer debt caused by a job loss or a medical issue. A security clearance holder recent found himself in the security clearance hot seat after inheriting his grandmother’s estate, and dealing with the issues of settling up her finances with his brother. For four years, the individual failed to file his federal and state income taxes, following the death of his grandmother in 2014. The grandmother’s estate was split between the security clearance holder and his brother, and according to the findings of fact presented to the Department of Hearings and Appeals (DOHA), there were several real estate holdings and other issues to deal with in settling the affairs of the estate.

The clearance holder claimed he sought the advice of an accountant in the initial stages of settling the estate and that individual advised him to not file his taxes until the estate was completely settled. Fast forward four years and the subject was facing the loss of his security clearance employment with estate issues unresolved and taxes unfiled.

In this case, the applicant was able to mitigate the tax and financial considerations issues, for a few reasons:

1. Admit Wrongdoing.

We see many cases where individuals actually deny or argue against the issues presented. Admitting you could have done better is actually a more responsible approach in many cases. The applicant admitted that he could have done better in managing the estate and wished he had done certain things differently. The case noted: “He stated: “there was a lot of confusion and misunderstanding as we taught ourselves how to submit the annual accounting.”

2. Highlight circumstances beyond your control.

COVID-19 was a side player in the applicant’s case, where he noted both difficulty in acquiring paperwork related to the estate planning which was delayed by COVID, along with the birth of a new child in 2019 which delayed the ability to handle estate issues. These things don’t necessarily justify the failure to pay taxes, but they give a reason for the lack of paying them that are beyond the control of the applicant.

3. Show Ability to Pay.

A great way to mitigate a security clearance denial or revocation tied to the financial considerations adjudicative guideline is by demonstrating ability to pay. In this case, the applicant was able to show that while he had initially failed to pay taxes for those four years, he wasn’t actually delinquent or in debt to the federal government. The key reason why financial considerations is a cause of security clearance denial or revocation is because having a significant amount of debt opens up an individual to blackmail. That may seem far fetched, but across tales of espionage, individuals have given up secrets in order to pay financial obligations. In this case, the applicant mitigated that by living within his means and being able to pay his obligations to the federal government.

False: You Can fail to pay taxes and still get a security clearance

Read through any of the many security clearance appeals cases presented before DOHA and you will see the security clearance whole person concept on display. If a security clearance is denied or revoked, it is because the government has a reason to doubt the reliability or trustworthiness of the applicant. Applicants can mitigate a whole host of issues by demonstrating that while they have ‘issues’ – those things aren’t actually a risk to the federal government.


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Lindy Kyzer is the editor of ClearanceJobs.com. She loves the NISPPAC, social media, and the U.S. military. Have a conference, tip, or story idea to share? Email lindy.kyzer@clearancejobs.com. Interested in writing for ClearanceJobs.com? Learn more here.