No, it does not mean that. It only means that your tax return is now going to be processed by the IRS. If you owe money to the IRS, your refund will be seized to pay it. When you prepare your return, TurboTax does not know that you still owe the IRS--there is nothing on your tax return to indicate that you owe the IRS from a previous year. But the IRS knows, and the IRS will take your refund if you owe--at least as much of your refund as necessary to pay the amount owed. You will receive a letter about it afterward.