PSH-22-0023 - In the Matter of Personnel Security Hearing

On March 9, 2022, an Administrative Judge determined that the Individual's access authorization should not be restored under 10 C.F.R. Part 710. The Individual is employed by a DOE contractor in a position that requires him to hold a security clearance. The Local Security Office (LSO) received derogatory information regarding the Individual's finances, which it relied upon to raise Guidelines E and F security concerns.

The LSO alleged that the Individual owed over $200,000 to the IRS after failing to pay his taxes for 2009 to 2013 when he was working as an Independent Contractor (IC) and his failure to have sufficient taxes withheld as an employee.   In addition, the LSO relied upon the Individual's failure to fulfilled two payment plans with the IRS and the Individual's 2018 assertion that he would do anything to come to an agreement with the IRS, which he failed to finalize. The LSO further alleged that the Individual: 1) knew he was liable for the outstanding taxes; 2) knew that he was supposed to file quarterly tax statements while working as an IC; 3)   realized after the first year of working as an IC that not having taxes withdrawn quarterly was a mistake, but he continued for another three years and accumulated approximately $170,000 in tax debt; 4) the Individual admitted that he has never saved any money outside of his retirement fund; 5) the Individual continued to open credit card accounts, use credit cards, purchase vehicles, and incur additional financial obligation, even though he had not paid his IRS obligations.

The Individual's tax indebtedness has been ongoing since 2009 and the circumstances that led to his indebtedness were not beyond his control. He knew when he became an IC that he would be responsible for paying his taxes and admitted that he knew after the first year that working as an IC was a "mistake." Further, the Individual admitted that his accountant instructed him to pay his taxes quarterly, including providing him with envelopes to mail payment to the IRS.   Finally, the Individual did not act responsibly while he owed the money to the IRS. During the time his tax debt was pending, the Individual took personal trips to Hawaii and Mexico. The Individual paid for his wife and young daughter to go to Hawaii. He also paid for the issuance of passports and transportation for eight people to travel to Mexico.

As of the date of the hearing, although the Individual had an agreement in principle with the IRS to pay an agreed-upon amount to resolve his tax liability, the Individual has failed to comply with at least two previous agreed-to payment agreements with the IRS. Moreover, as of the hearing date, the Individual has not started making payments to the IRS on his current tax liability. Consequently, it is my opinion that the Individual is not yet in compliance with the settlement agreement with the IRS.

The Individual had not mitigated or resolved the security concerns raised by his failure to pay his federal tax liability. Accordingly, the Individual was not able to demonstrate that he had fully resolved the security concerns arising under Guidelines E and F. (OHA Case No. PSH-22-0023, Fishman)