Can I Get A Tax Refund Under an Installment Agreement or Payment Plan?

This is a common question that we often get from taxpayers. They had a hard couple of years, went into tax debt, and now owe the IRS a lot of money. Luckily, however, they are on an installment agreement or payment plan. However, what they may not have realized is that by entering that agreement or plan, they signed all rights away to future tax refunds for the time being.

One of the conditions of your installment agreement is that the IRS will automatically apply any refund (or over-payment) due to you against taxes you owe. Because your refund isn't applied toward your regular monthly payment, continue making your installment agreement payments as scheduled. If your refund exceeds your total balance due on all outstanding tax liabilities including accruals, you'll receive a refund of the excess unless you owe certain other past-due amounts, such as state income tax, child support, a student loan, or other federal non-tax obligations which are offset against any refund

However, taxpayers should take note that this blog is not saying to avoid entering into an installment agreement or payment plan. If that is a venue to pay back your tax debt, it is a great venue to explore. The professionals at The Center for Financial, Legal, and Tax Planning are more than knowledgeable with regards to filing installment agreements, payment plans, and offers in compromise. Please contact us at (618) 997-3436 with any questions.