The Difference Between Innocent Spouse And Injured Spouse

Taxpayer asks:

What’s the difference in injured and innocent spouse? Years ago I separated and the IRS withheld my tax refund because of unpaid tax from my now Ex. Do I have any way to get that back?

Ask the Taxgirl: Kelly Phillips Erb, Forbes Staff

Taxgirl says:

This is a great question. Taxpayers confuse “innocent spouse” and “injured spouse” all of the time. Here’s what you need to know.

When you file a joint income tax return, the law holds you and your spouse jointly and severally responsible for the entire tax liability. What this means is that Internal Revenue Service (IRS) may collect the tax due from the both of you – or from either one of you. This is true even if you later separate or get a divorce and it’s true even if your divorce decree says that your ex is responsible for the outstanding debt.

Typically, you remain liable for the tax unless you can prove that you didn’t know or had no reason to know about the liability. That might be case because of unreported income (income received by your spouse or former spouse that was not reported) or an incorrect tax deduction, credit, or basis claimed by your spouse or former spouse.

Here’s an example. You filed a joint return with your spouse and later receive a letter from the IRS indicating that…