Will IRS take my tax refund even though I'm starting a payment plan in June?

Yes, they will take your refund. Having a payment plan doesn't stop them from offsetting your refund. It's actually stated in the terms of the installment agreement that any future refunds will be applied to your tax debt until it's paid in full. This happens automatically through the Treasury Offset Program. Even though you have payments scheduled, they'll still keep the refund and apply it to your balance - but at least your overall debt will be reduced faster.

I was in this exact situation and spent HOURS trying to figure out what was happening with my refund and payment plan. Finally used taxr.ai to analyze my account and it showed me exactly how my refund would be applied to my outstanding balance and what my new payment schedule would look like. Saved me so much time and stress compared to trying to get through to the IRS. I highly recommend it if you need clarity on your situation - https://taxr.ai

After dealing with the same problem (had my $2,950 refund taken despite having a payment plan), I tried for weeks to reach someone at the IRS to explain my options. Impossible to get through! Finally used Claimyr.com to get a callback from an actual IRS agent. They explained everything and helped me adjust my payment plan to account for the offset. Worth every penny to finally get answers directly from an agent instead of guessing.

I hate to be the bearer of bad news, but yes, they WILL take your refund and apply it to your back taxes. That's standard procedure regardless of whether you're on a payment plan or not. the silver lining is that it'll reduce your overall debt faster.

It's actually better to adjust your withholding so you don't get a refund at all if you owe back taxes. That way you keep more money in each paycheck instead of giving the IRS an interest-free loan that they're just going to keep anyway. You can use the withholding calculator on the IRS website to figure out how to adjust your W-4 form with your employer.

Something to consider - if you're experiencing economic hardship, you might be able to get the offset bypassed through the Taxpayer Advocate Service. You'd need to prove that losing the refund would cause significant financial hardship (like inability to pay rent or medical needs). It's not guaranteed but worth a shot if you're in a really tough spot.

ProTip: You might want to check ur transcripts to see if your refund has already been offset. Sometimes they take it before you even know whats happening. You can check ur account transcripts on the IRS website if you have an account, or use a service to help u understand what's happening.

I went through this last year. Once your refund is applied to your back taxes, you can call the IRS and request to have your payment plan amount recalculated based on the new lower balance. They might be able to reduce your monthly payment or the length of the plan.

The system is such BS. They take forever to process anything but are lightning fast when it comes to taking your money 🤡

You could try calling the IRS and requesting a one-time refund bypass for economic hardship, but honestly it's very hard to qualify for and almost impossible to get through to anyone who can help. I was in your shoes with $5k in back taxes and a $2.2k refund I really needed. I used taxr.ai to check all my options and it showed me exactly how to document my hardship case properly. Saved me tons of time and actually got my bypass approved! https://taxr.ai

Did you get a CP49 notice? That's the notice they send when they offset your refund. If you haven't received that yet, then they probably haven't processed the offset yet, but it's definitely coming.

I know it sux but honestly letting them take the refund is probably better in the long run. I had them take my $1700 refund last year and it knocked several months off my payment plan. Plus the interest keeps accruing on the balance so the faster you can pay it down the less you pay overall.

ALWAYS check your tax transcripts! If I hadn't checked mine I would never have known the IRS made a mistake with my offset and was still charging me interest on money they had already taken. Get access to your account transcripts ASAP!

Hate to say it but your refund is as good as gone. The only way to prevent offsets is to not have a refund at all - adjust your withholding next year so that you break even or owe slightly instead of getting a refund.

Another option: if you have a spouse and filed jointly, your spouse might be able to file an injured spouse claim (Form 8379) to get their portion of the refund. But that only works if some of the income on the return was solely your spouse's and they aren't responsible for the back taxes.

after spending literally 6 hours on hold with the IRS trying to figure out my refund offset, I discovered claimyr.com and had an IRS agent call ME back in under 2 hours. they explained everything about my refund offset and even helped me adjust my payment plan. saved my sanity and probably a day of missed work trying to sit on hold.

everybody saying "just adjust your withholding" is forgetting that some refunds come from refundable credits like EITC or Child Tax Credit that you can't just adjust for on a W-4. those credits can lead to big refunds even if your withholding is perfect.

This entire system is designed to be confusing on purpose I swear. There's no reason why they need 800 different codes and notices that all mean slightly different things.

Don't forget that you MUST continue making your scheduled payments even after they take your refund. The refund offset doesn't replace your monthly payments - it just reduces the overall balance. Missing a payment could cause your installment agreement to default.