In this ongoing saga of one Jennifer McKinney, pyramid topper at the MLM Xyngular, and recipient of millions of dollars of commissions…. I have a minor update in her bankruptcy case. (May I remind you, this is the THIRD time she’s filed for bankruptcy protection.)
Just to remind you…. Jennifer and her husband Israel McKinney owe the IRS more than $1 million in unpaid income taxes, interest, and penalties. Jennifer filed for bankruptcy to force the IRS to give her payment terms on what she owes. She runs around world doing luxury things and buying luxury items, but failed to fulfill one of the most basic adult responsibilities… paying her taxes first.
Her house is in foreclosure for non-payment of the mortgage, the IRS has liens on the house and her cars. The IRS has been going after her HARD, and it couldn’t happen to a more deserving individual.
Last month Jennifer asked the bankruptcy court to allow her to sell a 2015 Land Rover for $7,000 and sidestep the IRS lien on it, so she could buy a different car. For her kids to drive. The IRS objected, pointing out that the car was unnecessary ….given that they own 3 other cars in addition to this one, and they only have one child of driving age, and it’s not necessary for the kids to have a car anyway.
The IRS thinks it’s more important that the McKinneys pay the more than $1.4 million they owe to the IRS before they think about buying cars for the kids.
The Debtors’ schedules, in large part, show that they have accumulated over the years numerous assets—including multiple luxury-type items—while not paying their taxes and mounting an enormous tax liability. Debtors have acknowledged their failure to pay years of tax liabilities and have repeatedly represented that the sole purpose of this bankruptcy case is to rectify their delinquency to the IRS. Selling an asset subject to IRS’s lien and seeking to use sale proceeds to purchase a fourth car in lieu of paying down the tax liability seems inconsistent with that purpose. The request to purchase an unnecessary car further underlies concerns the IRS has expressed to the Debtors since the beginning of this case. Those concerns include other unnecessary and unreasonable expenses listed on the schedules, such as $450 a month to pay for Mr. McKinney’s mother’s mortgage, private school tuition, and an apartment for Ms. McKinney that is advertised as a luxury apartment and costs $2,355 in monthly rent.
Debtors may argue that the IRS should not be concerned because they will propose a plan to pay IRS’s secured and priority claims in full. Assuming the Debtors are successful in completing their Chapter 13 plan, the IRS will have to wait years to receive full payment and the government should not be forced to subsidize Debtors’ luxury-type lifestyle (including a car for every driving-age child) while it waits for payment, as it has done for the years leading up to the Debtors’ bankruptcy. Instead, it is the Debtors who must adjust their spending and lifestyle in return for receiving protection under the Bankruptcy Code and IRS being stayed from its collection efforts.
Yes, Jennifer McKinney has been living it up while stiffing creditors including banks, hospitals, her mother-in-law, the IRS, and the Wisconsin Department of Revenue. Her behavior is unlikely to change. Kudos to the IRS for not letting her get any sort of advantage in this proceeding. It’s time for karma to finally do its thing.