Adulting is hard. It’s so hard, there’s a hashtag for it. Unfortunately, filing tax returns is one of those realities that come at you – and may come back to bite you – if you apply for a security clearance.
True or False: If your income level is below the lowest tax bracket, you don’t need to bother filing.
We talk frequently at ClearanceJobs about how financial issues are the top cause of clearance denial and revocation. That’s not because the government has a deep bias toward those who come into financial issues – it’s because financial problems are some of the easiest to track, and if you can’t follow the basic rules of paying your bills on time or fulfilling your contract or legal requirements, the government figures it should not waste the effort on giving you a security clearance (which will actually cost it somewhere between $500 and $5000 depending upon your clearance level).
A recent case brought before the Defense Office of Hearings and Appeals (DOHA), made my mom heart sad – an applicant had failed to file taxes from the years 2016 through 2020. The years the applicant failed to file taxes were during his college years, when his only income was via student internships. The applicant obtained a position with a defense contractor following graduation, but unfortunately, according to the Statement of Reasons issued by the government, the applicant was at no point motivated to make an effort to file the unfiled tax returns, and ultimately, the security clearance was denied.
False: Even if the government owes you money, you still have to file taxes.
Filing taxes is less about a financial issue and more about a paperwork issue – adulting 101. It may be tempting to avoid filing your tax returns, but if you have a job of any variety – low paying, high paying, or in-between – you (generally) still have to file taxes. Under certain circumstances and if your income falls below a certain amount, you may not be required to file. But it’s important to consult your state and federal tax policies to be sure.
If you are a student, your taxes should be fairly straightforward. Even the IRS offers resources on filing your taxes. If you’re a student, there may be resources available on your campus, as well. In the case of the clearance applicant in question – he may not have needed to file a tax return, but he should have demonstrated that by proving that his income was below the threshold. In providing no documentation, he didn’t support his case.
Unfiled tax returns won’t keep you from getting a security clearance – but they will if you fail to address them prior to submitting a security clearance appeal. It’s less about the financial issue, and more about the ability to adhere to government rules issue. The government won’t see the details of what you do (or don’t owe). But they can see that you haven’t filed over the course of four years, and despite being notified that it was an issue through a SOR – you took no steps to address the issue.
This is an area where employers may do well to step in. We frequently get questions from applicants here to wonder if their employer will find out the embarrassing reason their security clearance is denied. But in straightforward cases like this, an ounce of education for a clearance applicant could enable a long and lucrative cleared career. If the applicant was willing to share the reason for the clearance denial with an employer, one would hope an employer may take the steps to help the applicant file taxes for the years that were ignored. Unfortunately, ignoring issues – particularly unpaid taxes – will get you nowhere.
