Will I Lose My Security Clearance If I Owe Back Taxes?

If you owe back taxes to the IRS, have unfiled tax returns, or have a tax lien against your property, you can eventually lose your security clearance. If you’re experiencing a tax problem like one of these and need to apply or reapply for a security clearance, you’ll likely be denied.

April 15 is almost here, which means you only have a few weeks to resolve any outstanding or foreseeable tax problems with the IRS. Although owing back taxes can result in penalties and other unpleasant consequences, this situation can also put your career with the federal government in jeopardy.

Taxes & Security Clearances

When someone applies for a security clearance, they must fill out a 120-page questionnaire and submit to a rigorous background check process. Part of this process is evaluating an applicant’s financial situation to determine whether or not debts they owe to the government or private creditors present a risk to the federal government.

Typically, mortgages, student loans, and other debts like these won’t draw much scrutiny. That said, extreme personal loan debts, credit card debts, and tax debt will. If a security clearance holder or applicant has also neglected to file a tax return for any number of years, this can also adversely affect their security clearance aspirations.

The reason for this is that those who owe back taxes to the IRS or haven’t filed a tax return that they should have are seen as unreliable and likely to engage in high-risk conduct. Such conduct, from the government’s perspective, puts classified information and national security at risk.

Denial Isn’t a Foregone Conclusion

Although having tax problems can drastically increase the likelihood of being denied a security clearance or having one taken away, these outcomes are not inevitable. When it comes to evaluating whether or not to grant or maintain a security clearance, the government looks at each applicant’s situation on an individual basis.

If you find yourself in a situation where tax-related issues seem to be affecting your security clearance, you can reach out to a security clearance attorney for assistance. We at Claery & Hammond, LLP represent clients in a wide range of security clearance matters, from the application process to appealing denials, maintaining their statuses, and fighting to protect a security clearance at risk of revocation.

For more information about how we can help, contact Claery & Hammond, LLP online now.