In a nutshell injured spouse relief allows an “injured” taxpayer spouse to have his/her tax refund restored that had been previously taken by the IRS and applied to the debt of the other “injuring” spouse.
If spouses file a joint income tax return and an IRS tax debt is owed by one of the spouses, the Service will generally offset the entire overpayment.
If the spouse who does not owe the obligation (referred to as the “injured spouse”) files a claim for his or her share of the overpayment (referred to as an “injured spouse claim”), the Service is required to refund his or her share of the overpayment.
An injured spouse obtains his or her portion of the overpayment by filing a Form 8379.
Texas residents need to be careful. Community property laws sabatoge rights enjoyed by residents of most other states.
In Texas, where one spouse owes a liability to a creditor, the IRS can collect from all of the separate property of the liable spouse. The IRS can even collect half or even all of the community property. The case to read on this issue is Medaris v. United States, 884 F.2d 832 (5th Cir. 1989).
The Service cannot reach the separate property of the nonliable spouse, however. Before getting married to someone with IRS tax debt you should seriously consider a premarital agreement. Even if the liability is incurred after marriage, Texas law allows for post-marital agreements. Such agreements must be considered very carefully in close consultation with tax and family law advisors.