When your return is filed and accepted then the IRS will connect your return with your debt. They will offset your refund for the amount of the debt (or all of the refund if the debt is more).
TurboTax would have no knowledge of this private information and the IRS does not allow this as an option on the return itself.
A condition of your installment agreement (if you have one) is that the IRS will automatically apply any refund due to you against taxes you owe.
The Understand your agreement & avoid default is:
- Your future refunds will be applied to your tax debt until it is paid in full;
- Pay at least your minimum monthly payment when it's due;
- Include your name, address, SSN, daytime phone number, tax year and return type on your payment;
- File all required tax returns on time & pay all taxes in-full and on time (contact us to change your existing agreement if you cannot);
- Make all scheduled payments even if we apply your refund to your account balance; and
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)