Can You Receive a Tax Refund If You Are On An Installment Agreement?


Michael LodgeBy Michael Lodge

We get this question a lot from clients that owe taxes and have entered into an installment agreement with the IRS.

So the question in full is – Can I receive a tax refund if I am currently making payments under an installment agreement or payment plan for a prior year’s federal taxes?

NO – a condition of your installment agreement is that the IRS will automatically apply any refund due to you against taxes you owe.  If your refund exceeds your total balance due on all outstanding liabilities including accruals, you will receive a refund of the amount over and above what you owe.

Because your refund is not applied toward your regular monthly payment, you must continue making your installment agreement payments as scheduled and in full until your liability including accruing penalty and interest is paid in full.

Regardless whether you are participating in an installment agreement or other payment arrangement with the IRS, you may not get all of your refund if you owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support.

The IRS is a very good debt collection organization and they have many ways to get the funds you owe the government.  If you have any tax questions please send an e-mail to: