I'm paying my 2007 income taxes under an installment agreement with the IRS. I'm anticipating a tax refund for 2008. Do I get this money?

I'm paying my 2007 income taxes under an installment agreement with the IRS. I'm anticipating a tax refund for 2008. Do I get this money?

According to the terms of an installment agreement with the IRS, any tax refund is automatically applied toward the outstanding balance of the agreement. The refund is not treated as a substitute payment, so you must continue to make the agreed payments (unless the refund covers that outstanding balance). The good news: Application of the refund toward your outstanding tax bill will, of course, reduce the interest you'll wind up paying on your 2007 tax liability.