To evaluate the polarity, energy band diagram, and oxygen (O) distribution of a heavily Mg-doped InN (InN:Mg+) epilayer with a Mg concentration of 1.0 ± 0.5 × 1020 cm−3, the core-level and valence band (VB) photoelectron spectra are investigated by angle-resolved soft and hard X-ray photoelectron spectroscopies. The InN:Mg+ epilayers are grown by radio-frequency plasma-assisted molecular beam epitaxy. In this doping level, the polarity inversion from In-polar to N-polar occurs with the increase in the Mg flow rate under the same growth conditions, and the VB spectrum clearly indicates the direction of polarity of InN:Mg+, which is N-polar. The energy band diagram is considered to exhibit a two-step downward bending structure due to the coexistence of the n+ surface electron accumulation layer and heavily Mg-doped p+ layer formed in the bulk. The O concentration rapidly increases until ∼4 nm with respect to the surface, which is deduced to be one of the reasons of the formation of the anomalous two-step energy band profile.