Posted by : Daniel Stoica in (Articles, Federal Taxes, Income Tax Return, Income Taxes, Tax Filing, Tax Forms, Tax Refund, Tax Tips) On: December 13th, 2011
Tagged Under : Federal tax, installment agreement, IRS, refunds, tax obligations, taxpayers
In a word, no.
Many taxpayers find themselves in a situation where they cannot pay their tax obligations for a particular tax year. If that’s your situation, you can opt to make monthly payments through an installment agreement if you’re not financially able to pay your tax debt immediately. You can find out more about installment agreements at http://www.irs.gov/individuals/article/0,,id=243335,00.html.
However, if you are currently paying your tax obligation through and installment agreement, any refund due to you in a future year will be applied against the amount that you owe.
Some facts about installment agreements and refunds:
• The IRS will automatically apply the refund to the taxes owed.
• You must continue making your installment agreement payments as scheduled and in full because your refund is not applied toward your regular payment, and therefore any payments due under the installment agreement must still be made in full.
• Regardless of whether you are participating in an installment agreement or payment plan 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. For more information you can contact Financial Management Service (FMS) toll-free at 800-304-3107.
If you have any questions about installment agreements or refunds you are owed, contact a tax professional.