Clearance Applicant Overcomes Failure to File Taxes for Multiple Years in Appeal

A recent Department of Energy (DOE) Office of Hearing and Appeals case involved a DOE contractor who had failed to file his federal and state tax returns from 2017 to 2022. He was initially denied security clearance eligibility based on financial concerns and subsequently appealed the decision. Here are the highlights of the appeal.

Starting in 2008 the contractor experienced difficulties in getting his taxes filed. In 2009, due to his belief it was too late resolve the 2008 rejected tax return, he continued to not file his taxes each year all the way through 2022. When asked by the appeals judge as to why he continued down this path, he said he didn’t want to pay thousands of dollars for a tax professional to sort it out. Instead, he adjusted his withholdings to ensure the maximum amount was taken out of his earnings. The contractor knew this would be an issue when he applied for the cleared position, so he took the initiative to contact the IRS to get his tax transcripts and hired a tax preparation company to help him get his taxes resolved.

The appeals judge noted the contractor had voluntarily taken steps to resolve his tax situation and now understands the importance of filing his taxes timely each year. He also noted the contractor was honest and forthright about his mistaken belief that he could not file subsequent years taxes beyond a certain point and avows this will not happen again in the future. As a result, the security concerns were mitigated, and clearance eligibility was granted. You can read the entire case summary here.