Yes, based on the agreement you signed with the IRS when you had the installment agreement. All refunds from Federal and State will be used to apply to the balanced owed until it is paid in full. Also, while the amount may reduce the amount owed, it is important to keep up with the monthly payments as that will not change unless you call to renegotiate. 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. For more information on these
non-IRS refund offsets, you can call the
Bureau of the Fiscal Service (BFS) at 800-304-3107 (toll-free)
