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.
Someone seeking a direct hire government position might not be so fortunate, at least not in terms of “suitability.”
Having read the case summary, I’m both a little surprised by the outcome, and this is one lucky guy.
It sounds like the only reason he filed his tax returns was because of his federal contracting job, so he would otherwise continue to be what the IRS refers to as an ‘egregious non-filer’ and skirt the law the rest of us follow. It’s possible he didn’t meet filing requirements in any of those years based on income and filing status. This is an unknown X factor.
However, an honest belief you can’t file tax returns 15 years later after one return gets rejected? (2008 + 15 = 2023). Really? He doesn’t have any friends or anyone else he knows that file tax returns and/or complain about the IRS and all the rigamarole you sometimes have to go through to get issues straightened out?
“Furthermore, his possibly mistaken—but honest—beliefs that he could not file for subsequent tax years after 2008 or that he could not file the 2017
tax return are also somewhat probative of poor judgment” - Somewhat?
Where else might the ‘somewhat probative of poor judgment’ crop up on his job as a contractor?
The IRS generally only wants the six most current years’ worth of tax returns. It will be interesting to note if he files the other missing tax returns even though the IRS most likely will not pursue this.
One time the adjudicator wanted some tax return info from me that was beyond what the IRS required. By some miracle I still had some stuff on hand. I was not an “egregious non-filer” but I may have qualified as a chronic late filer. Anyway it all worked out in the end.
That’s fortunate! IRS generally keeps 10 years worth of Wage and Income statements in an account, which may or may not have been what adjudicator wanted.