Yes, the IRS will automatically apply any refund you are due to back taxes you owe, even if you have an IRS installment plan set up and are making payments.

This is called a refund offset, and in many cases, the IRS is required by law to apply tax refunds to pay off existing federal tax debt, as well as other debt, like child support, state income tax debt, and federal nontax debt.

You do have some recourse if you are experiencing financial hardship. You can reach out to the IRS and request an Offset Bypass Refund (OBR), but you must make this request before the IRS has offset your tax refund.

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Sharon Brucker, CPA Senior Tax Research Analyst Published on: August 07, 2025
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*This content is for general informational purposes only. It is not intended to be comprehensive and should not be construed as professional tax or financial advice for any specific individual tax situation. Taxpayers should always consult a qualified professional for individual guidance. This information constitutes a solicitation under the Treasury Department's Circular 230. Most offices are independently owned and operated.