If I am currently on a payment plan with the IRS and in the agreement it states that your are not to owe any more taxes while in the payment agreement... what happens if I do owe for the current year. I am paying off 2004 taxes and now I owe for 2007... what is going to happen? It will default my agreement, will they set a new agreement or start levy action? It is still a payable amount. Thanks for any help!

If I am currently on a payment plan with the IRS and in the agreement it states that your are not to owe any more taxes while in the payment agreement...what happens if I do owe for the current year. I am paying off 2004 taxes and now I owe for 2007...what is going to happen? It will default my agreement, will they set a new agreement or start levy action? It is still a payable amount. Thanks for any help!
Adivise the IRS and requesst modified payment agrement based on new facts,

Pay 2007 taxes as well your regular installments. Else, you have broken the agreement and your interest rate will increase.

Agreed. Pay the 2007 taxes ASAP!

If that is not possible, then ask them to add the 2007 payments into the current payment plan.

You need to adjust your withholdings so this does not happen again.

They will work with you either way. Pay off the '07 ones if you can, if not, call them and they will add everything into one new payment plan.