Well, the Injured spouse is one who, for example, married him/her AFTER the tax debt was incurred, and in that case, only the funds belonging to the t/p owing the debt will be seized. The innocent spouse is one who did not BENEFIT from the unreported income. It's not just that one of them did not KNOW about it, if, for example, they lived in a bigger, nicer home, drove better cars, etc, than their reported income justified, the IRS is not going to buy the innocence argument.