Impact of Tax Liens on Security Clearance

TIPS TO PREVENT TAX LIENS FROM IMPACTING YOUR SECURITY CLEARANCE

Every year, hundreds of thousands of applicants submit for security clearance approval or renewal.  Simply completing the Form SF86 – all 127-pages – is a daunting task itself.  Applicants do not need any additional hurdles interfering with receiving their successful approval.  Yet, the existence of an outstanding tax debt is a frequent basis for security clearance denial.  If an applicant has a tax lien, follow these steps to increase your likelihood of a favorable outcome.

Resolve Your Delinquent Taxes Prior to Submitting Your Application

Many applicants believe that they can submit their security clearance application and then resolve their tax delinquency afterward.  They mistakenly assume that they need only resolve the tax lien prior to a decision being issued on the application.  Wrong!  Once the application is submitted, the research into the applicant’s background can commence promptly and any outstanding tax debts may quickly result in a negative assessment.

While this requires advance planning, applicants must do everything in their power to resolve all outstanding tax debt prior to submitting the application.  Doing so will give a person a much better chance of having the application approved.

After a security clearance application is denied, you are typically issued a “statement of reasons” advising as to the basis for the decision.  From there, the applicant typically has appeal rights.  However, once you are this far along, you are way behind the curve.  You want to start out this process as a “Winner”; not forced into filing an appeal with the hope of mounting a come-from-behind rally.  To put yourself in the best place position, resolve your delinquent tax issues prior to submitting your application or renewal.

Mitigation, Mitigation, Mitigation!

The reality is, most applicants simply are not in a position to quickly resolve their tax lien prior to the due date for their application or renewal.  Fortunately, the laws that govern security clearance issuances allow tax liens and other debts to be viewed less critically when the applicant has initiated good-faith efforts to repay the debt or when there are clear indications that the problem is being resolved or is under control.  So, take action immediately to show your efforts to resolve your tax lien. 

Equally important – document your actions!  Be sure to keep records of all the steps you have taken so that, if the time comes, you can demonstrate your efforts to mitigate and responsibly resolve the debt.

Tax Liens Are Treated Just As Any Other Debt.

Many applicants make the mistaken assumption that a tax lien will be viewed more favorably than other debts, such as a repossessed car or outstanding credit card debt.  No so.  The government views tax debt in a very similar manner to how it views many other forms of debt.  Ultimately, the guidelines under which applications and renewals are decided look for debts that demonstrate the failure to live within one’s means.  From the Government’s perspective, failure to live within your means reflect poor self-control, lack of judgment, or unwillingness to abide by rules and regulations.  Not attributes associated with a person handling Classified Information.  Accordingly, a tax debt, like most other forms of debt, will have a similar negative impact upon a clearance determination. 

BONUS – Don’t Go At Alone!

If you have already been denied and are now at the appeal stage, you have the option to proceed pro se, which means to represent yourself.  This is often a very bad idea.  Application appeals are viewed through the prism of a specialized legal analysis, and it is critical that you have an attorney on your side who understands the legal issues being advanced. 

When an application or renewal has been denied, your career is often in jeopardy.  Approach this issue with the seriousness it deserves and consult with an attorney who has experience in security clearance issues to help you through the process.

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