Tax Issues and Security Clearances

By John V. Berry,

We have had an increase in security clearance cases arising over the last 5 years involving the issue of taxes and security clearances. This article discusses some of the issues that security clearance holders with tax issues have been affected.

It is quite often the case that we represent security clearance holders or applicants who have had trouble timely filing taxes or with the payment of their state, federal or local taxes.  The security concern most often falls under Adjudicative Guideline F, Financial Considerations, but could also fall under Adjudicative Guideline E, Personal Conduct. These guidelines govern security clearance holders, whether they are federal employees or government contractors. 

Specifically, Guideline F, Paragraph 18(f) provides the security concern that the government has with respect to taxes: “failure to file or fraudulently filing annual Federal, state or local income tax returns or failure to pay annual Federal, state or local income tax as required.” 

Most Common Tax Issues Affecting Security Clearance Holders

The most common issues for security clearance holders or applicants when it comes to taxes is twofold: (1) the timely filing of tax returns; and (2) paying one’s owed taxes. Over the years, the timely filing of tax returns has almost been more important to security clearance adjudicators than actually being current on tax payments.  The good news for security clearance holders is that tax issues are becoming slightly easier to mitigate if one can demonstrate the effort under Security Executive Agent Directive 4 (SEAD 4). It used to be that untimely filings of returns would result in almost an automatic denial, but the newer clearance guidelines and the mitigation of such types of cases has become a bit easier.  

Mitigation of Tax Concerns – Steps to Take

The most important step for a security clearance holder or clearance applicant with tax issues is to engage the tax authorities at issue and start to try to resolve the issues.  If a resolution is obtained from the Internal Revenue Service (IRS) or other tax authorities, then mitigating the security clearance concerns can become easier.  

The new focus by security clearance adjudication authorities has been on resolving the underlying tax issues. There is still an issue that may have to be dealt with regarding the timeliness of the filing of past returns, but the focus has shifted, primarily, to how the individual has resolved their tax issues.  The new Guideline F, Paragraph 20 (g) at page 16 states that mitigation can be shown where “the individual has made arrangements with the appropriate tax authority to file or pay the amount owed and is in compliance with those arrangements.” This is a new addition to the security clearance guidelines for Guideline F, involving taxes.

Demonstrating Mitigation

To show mitigation for tax issues under Guideline F, individuals should obtain copies of their tax transcripts, where possible, but also obtain other potential information about payments and receipts.  Additionally, any correspondence with tax authorities is helpful. The goal is to show security clearance adjudication authorities that the individual has attempted to rectify the tax situation.  

Other issues that could mitigate the failure to file tax returns properly or on time include: (1) individual maturity or knowledge when filing returns; (2) the uniqueness of the tax situation or issues that could have affecting tax filings; (3) a more recent record of filing taxes on time; (4) classes or other guidance received from tax professionals that illustrate how the individual has learned from the deficient filings; and (5) the amount of time that has passed since the late tax filing issue. It is also not a bad idea for individuals facing this issue to retain an accountant to oversee the tax filing process which can potentially be used to mitigate these issues as well. I have attached a link to a case that is helpful in explaining the new approach to reviewing tax issues.  That case is attached here

Additionally, it can be helpful in these types of cases for a review of the Whole-Person Concept, which can demonstrate the overall trustworthiness of the individual. Oftentimes, former military service members and others with a dedicated background with the government can receive additional consideration when attempting to mitigate tax issues that have arisen in the security clearance process


If you are in need of assistance in the security clearance process please contact our office at (703) 668-0070 or through our contact page to schedule a consultation. Please also visit and like us on Facebook or Twitter.

Marijuana and Security Clearances Don’t Mix

By John V. Berry, Esq.,

There have been a number of states that have legalized marijuana over the past 10 years. This has led to a great deal of confusion by security clearance holders about the legality of marijuana usage while holding or seeking a security clearance. Many states like Colorado or California have legalized marijuana, but it remains illegal under federal law.  This can cause problems for security clearance applicants or holders. This article discusses these issues.



Image from Wikipedia, By Oren neu dag,


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Hiring a Security Clearance Lawyer

By John V. Berry, Esq., 

We typically meet with many federal employees and/or government contractors who are faced with security concerns or potential security concerns in obtaining, retaining or applying for a security clearance. These individuals often ask our attorneys at what point they should retain a security clearance attorney to assist, advise or represent them. This article discusses this topic.

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DOE Security Clearance Appeals


By John V. Berry, Esq.,

Both the Department of Energy (DoE) and the Nuclear Regulatory Commission (NRC) maintain their own security clearance procedures, as enacted into law by the Atomic Energy Act of 1954. This security clearance process for DoE employees is similar to the security clearance process for other federal employees and government contractors and is administered by the DoE Office of Hearings and Appeals.  This article discusses the issues in responding to DoE security clearance issues and clearance appeals. Continue reading

Self-Reporting Security Clearance Issues


By John V. Berry, Esq.,

Our law firm represents security clearance holders in security clearance investigations
and appeals. We also represent individuals that need to determine how and what to report involving new security concerns. One of the frequently misunderstood issues is a security clearance holder’s continuing duty to report on themselves for newly arising security concerns. In other words, self-reporting usually involves reporting a security incident in between the 5-10 year period for re-investigation. Federal agencies are slowly moving towards a system of continuous evaluation for clearance holders, but there is still a major duty for a clearance holder to self-report significant security concerns that arise between investigations. This can pose a problem where a person is essentially told to report on themselves. It causes many conflicts for clients.


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NSA Security Clearance Appeals

By John V. Berry, Esq.,

Pursuant to Executive Order 12968, the President of the United States has delegated security clearance determinations to each federal agency.  As a result, each federal agency security clearance process tends to be unique but they tend to share some similarities. These different federal agencies are supposed to follow the same Executive Order and Security Executive Agent Directive (SEAD) 4.

These federal agency processes are not centralized and vary somewhat. Some federal agencies tend to focus more on foreign influence (CIA) and others more on drug usage (FBI).  In addition to security clearances processed by the Department of Defense (DOD), other federal agencies have their own procedures and personnel that process their own security clearance decisions for federal employees and government contractors (e.g. DOS, DHS, DOI, NGA, DOE, NRO, CIA, etc). The National Security Agency (NSA) is an agency with its own security clearance process. This article addresses the security clearance process at the NSA for security clearances and Sensitive Compartmented Information (SCI) access.

The Clearance Process at the NSA

The security clearance appeals process at NSA is similar to the procedures for DOD employees, but there are some differences. The NSA follows the intelligence community (IC) policies regarding the processing of security clearances and SCI access. These policies are referred to in the Intelligence Community Policy Guidance (ICPG). The following are the usual steps in the security clearance review process for NSA clearance holders or applicants when they are confronted with security clearance issues.

First Step : Revocation / Denial Letter Issued by NSA

When a federal, military or contractor employee has a security clearance or SCI access issue with NSA, they will receive a revocation or denial letter from the NSA, listing the background and security concerns at issue. The background will list the specific security concerns at issue. The individual will usually then be given 45 days in which to request a review of the security concerns and respond to the security concerns. The investigative file, upon which the denial is based, will usually be included as well to facilitate a complete response by the individual. With other intelligence agencies, an individual must usually request this file. The investigative file will usually include documents, reports and/or other items relevant to the security concerns.

Second Step: Response to the NSA Revocation / Denial Letter

During the second stage of the clearance appeals process at the NSA, the individual will respond to the NSA revocation or denial letter. A response should address the security concerns at issue, e.g. Guideline B, Foreign Influence, Guideline B, Personal Conduct, Guideline J, Criminal Conduct or other issues and focus on the potential mitigation of the security concerns. It is very important to provide documentation, such as declarations, character letters, declarations, affidavits, and other documentation relevant to the security concerns or the character of the individual.

Third Step: Decision by Office of Personnel Security on First Appeal Review

Once the first appeal by the individual is received by the NSA, the NSA Office of Personnel Security will issue a decision as to whether or not the security concerns have been dismissed or otherwise mitigated. If so, the matter is usually then resolved and the clearance or special access restored. If not, the individual will be provided a decision, usually a page or two in length, discussing the reasons why the first level appeal was denied and of the right to a final appeal. The first appeal may indicate that some of the items have been mitigated, but that others have not been. There is a short timeframe in which to appeal, typically 15 calendar days from receipt of the initial decision.

Fourth Step: Meeting and Review by NSA Access Appeals Panel

The next step in the NSA security clearance process is for the employee to meet with the NSA Access Appeals Panel. This is an in person appeal where the individual can be represented by counsel in presenting evidence and argument as to why the security clearance or SCI access decision should be overturned. During this personal appearance before the Access Appeals Panel, the individual can present documents in support of keeping their security clearance to the panel. The panel is staffed fully, normally with 6-7 people present.  The panel may ask questions or sit patiently and listen to the arguments. In most cases, I have found that the panel asks a fair number of questions about the security concerns at issue.

Fifth and Final Step: NSA Access Appeals Panel Decision

Following the personal appearance, the NSA Appeals Panel issues a decision, either granting the clearance or access at issue or a denial. If a denial is issued, the individual may re-apply for a clearance or access a year later. Typically, a decision from the NSA has taken 2 to 6 weeks for a decision which is relatively quick for IC cases.


When an NSA employee or government contractor is facing security clearance issues at NSA it is important to obtain legal advice and potential representation. Our law firm advises individuals in the security clearance process. We can be contacted at or by telephone at (703) 668-0070. Our Facebook page is located here and our Twitter page here.

DOHA Hearing Security Clearance Tips

By John V. Berry, Esq.,

If you are a federal employee or government contractor whose security clearance is under review (commonly referred to as the Applicant or Clearance Holder) and you are in the process of having your case heard before the Defense Office of Hearings and Appeals (DOHA), there are a number of considerations to take into account as you move forward to the hearing.

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