The IRS has seen every kind of complication an American family or business can offer. So even in the tax-law sense of the terms, in a nation with a population of over 300 million, innocent and injured spouses are relatively routine to the IRS.
To save you time below, it might help to know now that “injured spouses” usually meet the IRS not long after their wedding and “innocent spouses” often meet them after their divorce.
Innocent spouse tax relief
Among many other things, marriage means sharing tax liability when you and your spouse file a joint tax return.
You both owe your taxes as a marriage, and if the IRS needs to take action to collect, you’re both and each responsible for paying the tax bill. Either of you may face the consequences for non-payment and both of you may. This is being “jointly and severally liable.”
You usually realize you’re an “innocent spouse” after divorce, when you’re faced with a tax bill for income your spouse didn’t report to the IRS and didn’t report to you either. There are ways to try to seek relief from the federal government, and this blog discussed the issue earlier this year at some length.
Injured spouse tax relief
Consider a case in which you’ve married someone who, for example, has been married before.
You file a tax return, paying what you think you owe and possibly expecting a refund, only to find you’ll get no refund and the IRS even says you’ve severely underpaid. It turns out your spouse has outstanding debts they never mentioned, or a state is using the IRS to get the unpaid child support your spouse hasn’t been paying.
Your tax liability has been imposed on you thanks to a marriage contract you entered into without having all the information you needed to properly decide whether to sign it. In some cases, this might even make the contract legally invalid.
You may be innocent in the common sense of the term, but you’ll probably consider seeking relief from the IRS as an “injured” spouse.
The relief would come in the form of a separate tax bill for you and your spouse, perhaps somewhat reminiscent of your single days, and the amounts ultimately would be based on calculations made by the IRS.
A somewhat more detailed contrast between innocent and injured spouse tax relief was published by Forbes.