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.

I love this part of the IRS’s objection to releasing the lien on the Land Rover:

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.


  1. MMAH 04/11/2023 at 8:00 pm - Reply

    Today (4/11), they (the IRS) have agreed to allow the purchase of the overpriced 2007 Subaru Impreza, but they have to forfeit the claim of 12K+ in IRS overpayment for 2022. I wonder what story they told to get that outcome. I doubt that Marine Credit will be as forgiving about the house. And so, I wonder where they will live, since according to the bankruptcy documents, she can’t have the kids with her full-time at the fancy apartment, and he’s claiming that he will be living in the RV post-divorce.

    • Tracy Coenen 04/12/2023 at 11:28 am - Reply

      I feel sorry for the kids. I feel nothing for Jennifer or Izzy. They deserve every bit of suffering after all the people they have screwed financially over the years.

      • MMAH 04/12/2023 at 4:14 pm - Reply

        I’m with you on that!

  2. MMAH 05/03/2023 at 5:21 pm - Reply

    Oh, holy cow. Today’s filing in objection to the revised plan, the IRS points out that Jennifer has not yet filed her 2022 taxes, nor has she filed a request for an extension. They can evidently force the dismissal of the bankruptcy or convert to a Chapter 7. WHAT are these people thinking, and WHERE is their attorney? I don’t understand all of the jeopardy they are in, but it seems bad. Any insight?

  3. Stephanie Hanson 05/03/2023 at 8:56 pm - Reply

    The IRS has filed today (May 3) that they do not want to approve the Chapter 13 because….drumroll…she has still NOT filed her 2022 taxes. My question: So what happens if the Chapter 13 is not approved? She currently has three or four vehicles, would she be allowed to keep one? Would she be able to purchase a new vehicle? How will she ever be able to bank with liens on her accounts?

    • MMAH 05/09/2023 at 11:50 am - Reply

      It’s not just the banking that’s a problem for her. How will she find a place to rent that will accommodate her and the kids, now that she’s losing the house? Many landlords won’t rent to someone with her payment history, and if they do, there’s a financial penalty for that. And then there’s the matter of the private school tuition, at two separate schools. There are so many bad outcomes to trace out here.

      One thing I do find interesting is that a proposed order was filed 5/4/23, and on 5/9/23 an order for payment (on the schedule proposed) was entered. As I read the 5/3/23 IRS objection, they are on board with the proposed payment plan, but still wanted the plan rejected for the other deficiencies. I wonder what’s going on outside these documents.

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