Each year in the month of April, every American citizen is required to file taxes. Regrettably, although a majority of taxpayers are aware of the tax deadlines, many continue to fall short of fulfilling their tax obligations. If you fall in this category and have yet to file your taxes, you should know that if you have applied for security clearance, your application could be in danger of being denied.
Moreover, if you currently hold a security clearance, you run the risk of losing your security clearance if you fail to file your taxes in time, thereby, subjecting you to potential termination actions by your employer.
The following are a few essential steps that could help you if you have questions or are facing challenges with your tax returns and/or security clearance.
Security Clearance: Reasons for Application Denials
If the United States federal government employs you, you likely are aware that the CIA, FBI, and other federal agencies have an obligation to provide security clearances only to those individuals that meet the qualifications for obtaining and maintaining a clearance.
Each year, the federal government receives enormous amounts of applications for security clearances. Of those who apply, a significant number of applications are denied. These denials can occur as a result of numerous reasons, but we will focus on one of the most common justifications – the failure to pay taxes.
How the Failure to Pay for Taxes Can Lead to a Security Clearance Denial
If a security clearance application was rejected based on a person’s tax history, there are essentially three three common reasons that this can occur:
- The Petitioner/Security Clearance Holder Owed Back Taxes – Back tax is a term used to define a person’s unpaid balance to the U.S. Internal Revenue Service (IRS). A person that has failed to file taxes within the last year or even a few years ago may have an outstanding back tax balance. In the event that the taxpayer owes less than $10,0000 in back taxes, the IRS can approve the taxpayer for an installment payment plan, which can allow him or her the opportunity to make their tax duty whole again.
- The Petitioner/ Security Clearance Holder Has Unfiled Returns – When a person has failed to file his or her taxes, the IRS takes this as an extremely serious issue. A person that has failed to file for his or her taxes can find that the IRS has filed on their behalf. Unfortunately, this will usually include hefty penalties and added taxes. Additionally, those who file late can be placed under further review. Therefore, an applicant must make sure that any past-due tax returns are accurate and filed in a timely manner for the IRS’ review.
- There Is a Tax Lien on the Petitioner/ Security Clearance Holder for Delinquent Taxes – A person who owes back taxes can find that the IRS has the ability to place a tax lien on his or her home and other properties. This legal claim is placed against the person’s assets for unpaid property taxes, which could result in the forfeiture of the home, property, and/or security clearance.
What to Expect in the Application Process
A person seeking security clearance in the United States federal government will need to complete a SF-86, Questionnaire for National Security Positions. The form is relatively extensive and will provide the U.S. Department of Personnel with the applicants personal information.
Once the 120-page document has been submitted, the petitioner will undergo a strict background check. This background check will usually alert interested parties of potential tax delinquencies, unfiled tax returns, or liens.
In the event that the applicant was discovered to owe the IRS back taxes or that he or she neglected to file tax returns for any given year, it is likely that the security clearance application will be denied.
How Taxes Can Affect Security Clearance
There are a number of reasons why government officials can deny a petitioner who has not filed for his or her taxes or has a delinquency status. The first is that the applicant is perceived to be untrustworthy. Individuals who are not dutiful about paying their tax return on time are usually seen as being irresponsible and untrustworthy.
Moreover, applicants can be rejected because having tax issues is perceived as having issues with following laws. This characteristic directly translates into concern about the applicant’s judgement and ability to safeguard sensitive information. The federal government will not risk the nation’s security with candidates who have monetary issues or have not paid their taxes.
Resolving Your Tax Issues
If you already have a security clearance but have unpaid taxes, you should know that having a security clearance does not mean your clearance is not at risk of being revoked. The failure to pay your tax obligations can place you on the road to a security clearance restriction or complete revocation.
If you are an interested candidate pursuing a security clearance and owe back taxes, have a lien on your property because of unpaid taxes, or have failed to file for tax returns, these issues should be taken care of before applying for a security clearance. In order to have a security clearance approval, it is in your best interest to do what you can to ensure your tax obligations have been made whole and any outstanding debts to the IRS are paid in full.
Seeking the legal support of a tax attorney is an excellent first step that can get you back on track in resolving past or present tax issues. This can also be very beneficial in preparing you for the security clearance process.
Attorney Brett O’Brien has many years of dedicated experience helping security clearance candidates obtain successful approval in their applications. Beyond the scope of tax issues, there are many other matters that could result in a security clearance denial. When it comes to obtaining security clearance, save time and money; obtain the legal support of an experienced attorney today.
