You should expect that they will intercept but I have seen people who owe large amounts for previous years get large refunds. Being in an installment agreement only prevents collection via levy and wage garnishment.
If anyone has had a difference experience I hope they will share.
Good luck with your situation.
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I agree with David Wiesen's answer.
If this is an issue, you should consider reducing your withholdings or quarterly estimated tax payments. See your tax advisor to determine the best way to do this without incurring a tax bill in the future.
Otherwise, the refund offset will only help you pay the delinquent tax faster.
I checked on this earlier this year and was informed by a tax employee of the State of California that there is not agreement with the IRS to allow the IRS to intercept refunds.
Phillip M. Smith Jr.
Los Angeles Tax & Business Attorney
Licensed in the United States Tax Court
Main: 323-292-4116 ❘ Cell: 562-505-1004
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