Mitigating Tax Issues

I understand this is a potentially disqualifying issue – did not file taxes for 5 years while self employed. I’ve filed the past two tax seasons and will this one as well; no longer self employed (and forever forward, obviously).

I was very poor and wouldn’t have been able to afford my tax burden (which is entirely self employment, I didn’t make enough to owe income), and also suffering from depression (which I was taking medication for and receiving therapy two sessions a week for about 6 years). Anyways, that’s not too important – it’s not responsible regardless and I’m happy to be working on this now whether it gets me denied or not.

That said, obviously I do want to be cleared and want to do my best to mitigate. IRS is still processing my returns, which I was working on prior to starting this job (which does not require a clearance) and submitted prior to filling out my SF-86. I am giving them 10% of my current take home monthly anyways as a placeholder for an official payment plan, and will be dumping my old 401k into it (a couple thousand) as my income will still be under the standard deduction so I’ll just be paying the penalty. Additionally, as far as good faith goes, the IRS did not have me on their radar at all - no notices, no replacement returns, etc; this is just me belatedly getting right with them.

I have no other financial issues, never missed a payment on anything and have 790 credit, so I feel that reflects well on being able to trust my future commitment to the TBD payment plan. I think that my receiving massive amounts of therapy for the depression and anxiety I was experiencing and “graduating” into an emotionally healthy individual for years also looks good.

Anyways, are there any questions I should anticipate? Any other things I can do to help adjudication look favorably on me? It really is a behavior that I’m embarrassed by and is now behind me, so it’d be nice if the government recognizes that as well (though I understand how this reflects poorly on my judgement).

“Why didn’t you pay your taxes? Were you aware that you were required to pay taxes? What steps have you taken to file the required tax returns and settle any outstanding debts?”

Depending on the agency and the level of clearance, the steps you describe above may be sufficient to mitigate concerns. If this is for a contractor position your chances may be better than for a direct hire civilian job where “suitability” concerns may come into play.

Financial concerns continue to be one of the leading reasons (if not the #1 reason) people get denied so you are probably looking at a denial where you may get a chance to appeal. Continue to keep up with the payments, keep all documents, and that would support a successful appeal (if it goes that route).

Yea I’m anticipating getting a clearance after a hearing if it happens at all. It’s TS/SCI I’m being put in for by the contractor I work for.

I’m not particularly wanting the cleared career path as far as life dream goes or I’d wait to resolve things further before even trying; but since work wants me to I’m going to do my best now and I understand and won’t be beat up about a denial. If I do get cleared it’d be cool to serve country and it obviously opens doors regardless.

I have marijuana use that wouldn’t be an issue (2 years ago and state legal) if everything else were above board. Is that going to be relevant derogatory information for whole person analysis re: this issue, which I expect receiving SOR for?

Anyways thanks for answer, nothing surprising which is good for checking I have a realistic grasp of situation.

Keep in mind, this investigation and clearance is a federal matter and whether or not marijuana use is legal in your state is not of primary importance. Yes you are probably right that infrequent use that occurred more than two years ago is not major concern but it still might attract some attention as I like to say.

I am a bit confused. If you don’t owe any taxes, there won’t be any penalty. Penalties are based upon amount of unpaid taxes.

Hi - I have an update. Was granted my TS/SCI in June. Had an 8.5 hour interview with investigator July 2021, where I provided evidence of my payment plan with regular payments (and numerous one-off payments in addition to the scheduled monthly). Had an additional opportunity to provide investigator more evidence of progress in December 2021, where I showed more regular payments and that it was approximately 60% paid off.(appointment was a follow up just to fingerprint me, as that hadn’t been done yet).

I actually paid off the entirety of the $18.5k I originally owed in March this year.

I received a call from an adjudicator in May 2022 asking for additional information about my prescriptions (I’m diagnosed bipolar as well). I told her that I’d paid off the taxes and she didn’t even consider it worth adding to the file as I’d already provided them a payment plan with proof of payments.

Did receive an eyes only letter after adjudication, but it was just signing to acknowledge I would report any changes in counseling or medication. Which seemed silly to me as it’s already mandatory to report that, but whatever.

Anyways, if you’re candid and show serious effort per the mitigation guidelines it can still work out . This was for intel agency.

8.5 hour interview… WOW… I’ve had them take 4 hours, I had one take a little over 5 (recruiter falsified his entire sf86) these were all in person but 8.5 hours even by phone must have been rough. Your investigator/agent must have been a saint.

It was just a line by line review, and I’d spent approximately 2 recent years in foreign countries with multiple jobs in each. And the contacts that come with it.

But yea she was a saint and very friendly. Just wish the interview hadn’t started at 11am…

I made one actual mistake on the form (said I’d never illegally purchased drugs), but that was a non-issue since I volunteered the correction and had already disclosed it as part of the drug use question. Just mind blanked as it was state legal purchase.