Both having outstanding federal or state tax debt and/or filing federal or state tax can negatively impact an individual's ability to obtain or maintain a security clearance.
Under the Security Executive Agent (SEAD) 4, National Security Adjudicative Guidelines, tax issues fall under Guideline F- Financial Considerations. Under Guideline F, the concern involves the failure to live within one's means, satisfy debts, and meet financial obligations. This may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness, and ability to protect classified or sensitive information.
Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds.
There are several disqualifying conditions under Guideline F which relate to both outstanding tax debt and untimely filing. For example:
- ¶19(a) states that a disqualifying factor is the inability to satisfy debts.
- ¶19(b) states that a disqualifying factor is the unwillingness to repay debts regardless of the ability to do so.
- ¶19(f) states that a disqualifying factor is the failure to file or fraudulently filing. annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required.
When reviewing the impact of outstanding tax debt or untimely tax filings, there are several mitigating factors the government takes into account when ultimately determining whether it is clearly consistent with national interests for an individual to obtain or maintain a security clearance.
A few of those factors include the events that resulted in the outstanding debt or untimely filing and the actions the individual has taken to resolve the outstanding issue. It is imperative when applying for security clearance or responding to a Notice of Intent to Revoke to have a clear, documented plan in place to resolve the outstanding tax debt. It is also important to provide mitigation as to why the debt incurred to begin with and a plan to ensure that future tax debt will not occur.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
