Outstanding Tax Returns (SF86)

I am up for my TS renewal and I am going to have some issues with declaring taxes on my investigation. I didn’t file taxes for 2018, 2019 and 2020 until this week. I ended up owing a substantial amount of money that I didn’t realize was outstanding for my 2019 taxes as I sold a home that year. I never spent the money from the house sale other than paying off all outstanding credit card debt and the remainder of the money is still sitting in my bank account.

As soon as I completed the process of bringing my taxes up to date, I immediately logged into the IRS and my state websites and paid the full amount owed.

I am going to have penalties and late fees from the IRS for not paying my taxes on time which cannot be resolved until I am informed what those fees are. I have the money but can’t pay it until then.

What is the best way to declare all of this on my SF86? I am pretty sure that even though I didn’t spend all of the money and paid it off in full (What I can at least) that I am going to be screwed on my investigation.

The failure to file is the biggest concern. The failure to file for three years is a bigger concern. That is the story you will explaining to the investigator.

The penalties are a minor issue until they become delinquent.

Read the questions pertaining to taxes carefully. You will probably have to provide some additional comments but no need to go into brutal detail on the SF86, the investigator will definitely follow up on it.

Make sure you have documentation available to show to the investigator.

Yes this is a major concern but I think it would be worse if you were applying for a federal job as this would likely lead to suitability concerns.

You may even want to tell your FSO about this but I’m not sure if it is reportable.

Thanks for the responses. I will talk with my FSO tomorrow when I am back in the office and document everything on my SF86. Although I have never used my TS clearance in the 15yrs I have had it, it’s still a requirement for my job. Hoping that everything will turn out ok. I just let life get away from me with everything going on.

I didn’t file taxes 2010-2019 due to a multitude of personal reasons. Then I took a job with the opportunity for a TS Clearance. I immediately sought help from security clearance consultant, tax attorney, co-workers and this blog.

The security clearance consultant accepted my $350 for a single session only to inform me I had zero chance to ever hold a clearance. “Give up”

The tax attorney worked very quickly with his accountant to file all taxes on my behalf. I owed $25k in back taxes. Before those returns were even filed I filed an installment agreement and wrote a certified letter to the IRS, requesting consideration for my proposed monthly repayment amount.

Guidance from coworkers and this blog included over sharing my situation, in detail, directly on the SF86 under additional comments section.

So that’s what I did…10 pages worth. In detail. I explained, how I found myself in my then scenario, provided details related to the tax attorney/CPA and consultant, and then explained my path to mitigate, and repay… I included/attached proof of filings, a copy of the installment agreement, and the IRS’s response accepting my repayment proposal. I also relayed how life had changed, why it changed, and ensured the reviewer of future compliance.

OVER SHARING WORKS.
My clearance was approved in 61 days.

Please Note: I held zero debt, zero bad debt, zero legal issues, zero drug/alcohol issues. Just pure depression, inability to find a job in a horrible economy, and the jobs I held were either intermittent, PT or contracted only for short-term. Life turned on a dime the moment I fled Commiefornia.

Do not give up.

See this post: Failure to File Taxes Will Sink Clearance Eligibility on ClearanceJobs Blog

So you only paid taxes when you knew you were going to have to for your employment?

How nice.

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And then apparently brag about getting away with it on this forum…integrity at it’s finest.